DOING BUSINESS in Belarus 2017 - Ministry of Foreign...

DOING BUSINESSin Belarus

2017

6th EDITION

Doing Business in Belarus 2017 Greetings

Greetings, our dearest would-be investor!

Many investment reviews would start from a list

of reasons why this particular country is good for

investors: competitive business environment, advan-

tageous geographical position, well-developed infra-

structure and high business rating – all would be

normally named. This is quite natural, because any

country review aims at attracting investors' notice.

However, if you think of it, any of over 250 countries in

the world will have similar or equal advantages,

which renders such an approach pointless.

In our Doing Business 2017 guide we aim not just at presenting the advan-

tages of business in Belarus, but also at assisting you in making your independ-

ent assessments of the existing risks and in forming a competent and impartial

judgement about our country's opportunities. You will not find a list of public

holidays or a “5 reasons to invest in Belarus” here. You will only find facts which

will be most illustrative of our national business environment.

Doing Business 2017 guide has been compiled by REVERA lawyers. The

guide contains a comprehensive review of all legal spheres and business fea-

tures: from choosing a fitting tax regime to antimonopoly legislation.

I believe that this Doing Business will resolve your questions and will be a

good aid in making your sound decisions.

Sincerely,

Dmitry Arkhipenko

REVERA managing partner

Doing Business in Belarus 2017 Facts and figures about REVERA

REVERA is a successful law firm

providing professional consulting

services to foreign and Belarusian

companies since 1998.

18 years of impeccable

customer service, detailed knowl-

edge of the complex and constantly

changing Belarusian legislation

allowed us to become leaders on the

Belarusian market of legal services.

Today our company is one of the

largest in Belarus: we unite more

than 40 lawyers.

The main advantage of

REVERA is unique experience

gained by accompanying a number of

investment projects. The team's

experience includes legal support of

M&A, restructuring of groups of

companies, construction projects, as

well as resolution of corporate and

administrative disputes. The key

clients of REVERA include manufac-

turing, IT companies, construction,

retail and pharmaceutics.

Having summarized work

results of law firms in 2011 and 2013

the Ministry of Justice of the Republic

of Belarus recognized REVERA as

the best law firm in Belarus.

Our company is recognized and

recommended by a number of

authoritative sources and interna-

tional guides, such as Chambers

Global, Chambers Europe, Legal 500,

IFLR 1000, PLC Which lawyers, Best

Lawyers, Who's Who Legal.

Also the membership in the

biggest legal association Terralex

(155 companies from 100 countries)

is a significant event.

Today REVERA offers a wide

range of legal services in the

following spheres:

џ Investment Project Support

џ Construction and Real Estate

џ Intellectual property

џ Customs Law

џ Currency Regulation and Foreign

Trade

џ Economic Disputes

џ Administrative Disputes

џ Mediation

џ Antimonopoly Law

џ Tax Consulting

џ Support of corporate procedures

џ M&A, Due Diligence

џ Employment Law

џ Intellectual property and IT

technologies

џ Contract work

This overview has been prepared and complied by experts of REVERA with

participation of specialists of Ministry of Foreign Affairs of the Republic of Belarus, National

Agency of Investments and Privatization on the basis of the Belarusian legislation as of March

01, 2017 (unless otherwise is stipulated hereinafter) for informational purposes only.

Reproduction of any content is strictly prohibited without referring to REVERA.

As of January 1, 2017 the official Belarusian ruble exchange to Euro is 2,045 Belarusian

rubles.

As of January 1, 2017 the amount of the basic unit is 23 Belarusian rubles.

Any written or oral quotation must include an obligatory reference to the information

about the rightholder specified on the front page.

The author of the cover photo is Dmitry Vazhnyk.

Facts and figures about REVERA

ranked among the leaders in the Belarusian market of legal services according

to Chambers Global and Legal 500

the best law firm in 2011 and 2013 according to the Ministry of Justice

of the Republic of Belarus

REVERA lawyers are recommended by Chambers Global, Legal 500, IFLR1000 international

guides as experts in investment projects, M&A deals, companies restructuring, support of

construction activities, dispute resolution and intellectual property law

REVERA is a member of TerraLex network that unites 155 independent law firms

from 100 countries of the world

lawyers in our team – the

biggest number for Belarus

years of experience

foreign investors have

received our consultation

clients

• Investment Project Support

• Construction and Real Estate

• Intellectual property

• Customs Law

• Currency Regulation and Foreign Trade

• Economic Disputes

• Administrative Disputes

• Mediation

We specialize in:







rubles.

















years of experience



clients




• Customs Law




• Mediation

We specialize in:

Doing Business in Belarus 2017 Facts and figures about REVERA







rubles.

















years of experience



clients




• Customs Law




• Mediation

We specialize in:

Doing Business in Belarus 2017National Agency of Investment

and Privatization

Companies that are planning to come to do their

business in Belarus can observe positive changes

happening to the country: the initiatives to improve

the business climate get actively implemented;

large-scale PPP projects in the sphere of infrastruc-

ture get launched. Belarus shows its openness to the

world and its readiness for cooperation. So, for

example, the current year has already been marked by

introduction of a visa-free regime for citizens of 80

countries, and businessmen can freely make visits to Belarus and stay for up to 5

days without getting any visa.

I also want to bring your attention to the fact that the National Agency of

Investment and Privatization is set to work by your side on implementation of

successful projects together. We assist companies that have chosen to do their

business in Belarus, and help them feel at home in the country, providing all-

round support. We supply investors with accurate information about investment

opportunities and business climate in Belarus, and support their projects

throughout their lifecycle, including the selection of reliable partners and the

post-investment support.

REVERA's annual overview provides the most convenient and quick way

to receive complete and up-to-date information about practical issues of doing

business in the country, and brings along a systematic understanding of the

legal framework which applies to doing business in Belarus.

We hope this overview will become a starting point for your successful

business in the Republic of Belarus, and we will be happy to see you among our

partners!

Welcome to Belarus!

Natallia Nikandrava

Director

National Agency of Investment and Privatization

Doing Business in Belarus 2017 CONTENTS

1. About Belarus .....................................................................................................................................10

1.2 Economy ................................................................................................................................................................11

2. Business Environment .......................................................................................................................13

2.1. Business Entities ................................................................................................................................................14

2.1.1. Private unitary enterprise ............................................................................................................................14

2.1.2. Limited Liability Company ..........................................................................................................................14

2.1.3. Additional liability company ......................................................................................................................15

2.1.4. Closed joint-stock company........................................................................................................................15

2.1.5. Open joint-stock company ..........................................................................................................................15

2.1.6. Representative offices and brunches of business entities...............................................................16

2.1.7. Procedure of registration of commercial entities in the Republic of Belarus ...........................16

2.1.8. Expenses on registration of commercial organizations and representative offices...............16

2.1.9. Business liquidation and reorganization ...............................................................................................16

2.2. Ways of doing business by foreign organizations and individuals in the territory

of the Republic of Belarus ..............................................................................................................................16

2.2.1. Doing business through permanent representative office in Belarus.........................................16

2.2.2. Implementation of activity through a permanent establishment

in the Republic of Belarus ...........................................................................................................................17

2.2.3. Doing business through the dependent agent....................................................................................17

2.2.4. Establishment of a representative office in Belarus .........................................................................19

2.3 Labour relations and working conditions .................................................................................................20

2.3.1. Information on the Labour market .........................................................................................................20

2.3.2. Legal regulation of labour and related to them relations ...............................................................20

2.3.3. Schedule of work and rest...........................................................................................................................20

2.3.4. Payment for labour ........................................................................................................................................21

2.3.5. Local acts in the sphere of labour relations .........................................................................................22

2.4. Labour migration ..............................................................................................................................................22

2.4.1. Entry into the territory of the Republic of Belarus to perform labour activities ....................22

2.4.2. Stay in the territory of the Republic of Belarus ...................................................................................23

2.4.3. Permission for labour activity....................................................................................................................23

2.4.4. Responsibility for migration legislation violation ..............................................................................24

2.5. Licensing ...............................................................................................................................................................24

3. Investment ..........................................................................................................................................26

3.1. General conditions for investment ..............................................................................................................27

3.2. Preferential investments treatment ............................................................................................................27

3.3. Investors' rights and obligations ..................................................................................................................29

3.4. Right to conclude an investment agreement (investment agreements) with

the Republic of Belarus ...................................................................................................................................29

3.5. Guarantees of investor's rights......................................................................................................................30

3.6. Guarantees and privileges for investors that concluded the investment agreement ...............30

3.7. Investments in a form of public-private partnership ............................................................................31

3.8. Investments on the basis of concessions ..................................................................................................32

3.9. Dispute resolution between an investor and the Republic of Belarus ...........................................32

3.10. Investment agent ............................................................................................................................................32

3.11. External guarantees of investments in Belarus....................................................................................33

3.11.1. Multilateral Investment Guarantee Agency........................................................................................33

3.11.2. Agreements on assistance in realization (encouragement) and protection

of investments................................................................................................................................................33

4. Privatization .......................................................................................................................................34

4.1. The concept of privatization ..........................................................................................................................35

4.2. The procedure of privatization......................................................................................................................35

4.2.1. Special aspects of selling shares (stocks in authorized funds) and enterprises

as property complexes at auction ............................................................................................................35

4.2.2. Special aspects of selling shares (stocks in authorized funds) and enterprises

as property complexes on the basis of competitive bidding .........................................................36

4.2.3. Selling shares of open joint stock company according to the results

of trust management.....................................................................................................................................36

4.3. Transformation of the state unitary enterprises into the open joint stock Companies ............37

5. Construction and Real Estate............................................................................................................38

5.1. Real estate............................................................................................................................................................39

5.2. State registration of real estate, rights and deals with it....................................................................39

5.3. Land plots .............................................................................................................................................................40

5.3.1. Ownership of the land plots.......................................................................................................................40

5.3.2. Permanent use.................................................................................................................................................40

5.3.3. The right for temporary use of land plots .............................................................................................40

5.3.4. Lease ...................................................................................................................................................................41

5.4. Construction.........................................................................................................................................................41

5.4.1. Regulation of activities in the construction sphere...........................................................................41

5.4.2. Procedure for concluding construction contracts ...............................................................................42

6. Pharmaceutical activities ..................................................................................................................44

6.1. Licensing of pharmaceutical activities.......................................................................................................45

6.2. Registration of medicine .................................................................................................................................45

6.3. Pricing in medicines..........................................................................................................................................45

6.4. Advertising of medicines.................................................................................................................................45

7. Finance and Banking System ............................................................................................................46

7.1. Payments and financial statements.............................................................................................................47

7.1.1. The procedure of using cash.......................................................................................................................47

7.1.2. Financial statements .....................................................................................................................................47

7.2. Pricing.....................................................................................................................................................................48

7.3. Banking system ...................................................................................................................................................49

7.3.1. Banking principles..........................................................................................................................................49

7.3.2. Bank authorized fund and its formation procedure............................................................................49

7.3.3. Terms and conditions for obtaining a banking license......................................................................50

7.3.4. Additional requirements for establishment and activities of banks with

foreign investments.......................................................................................................................................50

7.3.5. Representative office of a foreign bank..................................................................................................51

7.4. Securities market................................................................................................................................................51

7.4.1. Types of securities ..........................................................................................................................................51

7.4.2. Professional and exchange activity on securities market. The conditions

of obtaining the licenseon professional and exchange activities pursuit..................................51

8. Currency Control and foreign trade transactions ...........................................................................53

8.1. Currency control .................................................................................................................................................54

8.2. Implementation of foreign-trade operations...........................................................................................55

9. Tax system of the Republic of Belarus.............................................................................................57

9.1. General information..........................................................................................................................................58

9.2. Transfer pricing ...................................................................................................................................................59


9.3. Taxation of business entities .........................................................................................................................59

9.4. General system of taxation: primary payments ......................................................................................59

9.5. Special tax regimes ...........................................................................................................................................65

9.5.1. Simplified taxation system .........................................................................................................................65

9.5.2. Tax on gambling business ...........................................................................................................................67

9.5.3. Taxation in middle, small towns and in countryside .........................................................................67

9.5.4.Single tax from individual entrepreneurs and other individuals...................................................68

9.5.5. Single tax for producers of agricultural products...............................................................................68

9.5.6. Single tax on imputed income ..................................................................................................................69

9.6. Taxation of individuals.....................................................................................................................................69

9.7. Agreements on avoidance of double taxation .........................................................................................69

9.7.1. Rates of tax on profits in the form of dividends in agreements on avoidance

of double taxation..........................................................................................................................................70

9.7.2. Rates of tax on profits in the form of interests in agreements on avoidance


9.7.3. Rates of tax on profits in the form of royalty in agreements on avoidance


10. Territories with special legal status ..............................................................................................78

10.1. Free economic zones (FEZ) .........................................................................................................................79

10.1.1. Joining FEZ ....................................................................................................................................................79

10.1.2. Taxation of FEZ residents.........................................................................................................................79

10.2. High Tech Park (HTP).....................................................................................................................................80

10.2.1. Joining HTP ...................................................................................................................................................80

10.2.2. Types of activities carried out by HTP residents..............................................................................81

10.2.3. Taxation of HTP residents........................................................................................................................81

10.3. Taxation of the Industrial Park “Great Stone..........................................................................................82

10.3.1. Joining Industrial Park “Great Stone” ...................................................................................................82

10.3.2. Taxation of the residents of Industrial Park “Great Stone” ............................................................82

11. Monopolistic Activity and Illicit Competition ...............................................................................84

11.1. Monopolistic Activity: General Information ...........................................................................................85

11.1.1. Antimonopoly control over creation of holding companies.........................................................85

11.1.2. Antimonopoly control over transactions with stocks (shares).....................................................86

11.1.3. Non-compliance with the obligation to obtain the approval ......................................................86

11.1.4. Anti-monopoly control over agreements (coordinated actions)

of business entities ........................................................................................................................................86

11.1.5. Consequences of conclusion of anticompetitive agreements,

and coordinated actions...............................................................................................................................87

11.1.6. Anti-monopoly control over activities of business entities with

the dominant position ..................................................................................................................................87

11.2. Unfair competition..........................................................................................................................................87

11.3. General principles and rules of competition in the Eurasian Economic Union ........................88

12. The Republic of Belarus as a part of Eurasian Economic Union ................................................89

12.1. General information about the Eurasian Economic Union ...............................................................90

12.2. Tariff regulation in the Eurasian Economic Union...............................................................................90

12.3. Tariff preferences applied by the state members of the Eurasian Economic Union................91

12.4. Unified measures of non-tariff regulation in the the EEU...............................................................92

12.4.1. Quantitative restrictions on export and/or import..........................................................................92

12.4.2. Exclusive right to export and/or import..............................................................................................92


12.4.3. Automatic licensing (supervision) ..........................................................................................................92

12.4.4. Permissive procedure for import and/or export of goods.............................................................92

12.5. Indirect taxation ..............................................................................................................................................93

12.5.1. Indirect taxation of export of goods.....................................................................................................93

12.5.2. Indirect taxation of import of the goods.............................................................................................93

12.5.3. Indirect taxation of performance of works, provision of services ..............................................93

12.6. Supervision over safety and quality of goods in the EEU ................................................................93

12.6.1. Certification (declaration of conformity) .............................................................................................93

12.6.2. Registration of goods safety ....................................................................................................................94

12.6.3. Veterinary control ........................................................................................................................................94

12.6.4. Quarantine and phytosanitary control .................................................................................................94

12.7. Customs measures protecting the intellectual property objects....................................................94

12.8. The EEU functioning within the multilateral trade system ............................................................95

13. Intellectual Property .......................................................................................................................96

13.1. Objects of copyright and related rights...................................................................................................97

13.2. Industrial property objects...........................................................................................................................97

13.2.1. Inventions, utility models, industrial designs ....................................................................................97

13.2.2. Means of individualization .......................................................................................................................97

14. Consumer Protection and Advertising...........................................................................................99

14.1. Information about goods and a seller (manufacturer) ....................................................................100

14.2. Obligations of a manufacturer (seller or performer)........................................................................100

14.2.1. Obligations of a manufacturer (seller, performer) to ensure safety

of goods (works, services).......................................................................................................................100

14.2.2. Obligations of a manufacturer (performer, seller) to establish service life,

expiration date, shelf life, warranty period for goods (works, services) ................................100

14.2.3. Obligations of a manufacturer (seller, supplier, performer) to ensure the possibility

of using the product (result of work) for the intended purpose, its repair

and maintenance......................................................................................................................................101

14.3. Liability of a seller........................................................................................................................................101

14.3.1. Liability of a seller (manufacturer, supplier, representative, performer)

for improper information about goods (works, services) ............................................................101

14.3.2. Liability of a seller (manufacturer, performer) for damage caused by defects

in goods (works, services) .........................................................................................................................101

14.3.3. Liability of a seller in the event of sale of defective goods.......................................................101

14.3.4. Consumer's right to return goods of good quality ........................................................................101

14.4. Advertising ......................................................................................................................................................101

15. Renewable energy sources...........................................................................................................103

15.1. Pricing in RES industry ..............................................................................................................................104

15.2. Tax and customs privileges for green energy producers ................................................................104

15.3. Procedure of applying for RES plants quotas....................................................................................105

16. Telecommunications and uploading data to the Internet .......................................................106

17. Court system...................................................................................................................................109

17.1. The Constitutional Court ............................................................................................................................110

17.1.1. Competence .................................................................................................................................................110

17.1.2. Procedure for verification of the conformity of legal acts with the Constitution

of the Republic of Belarus.......................................................................................................................110

17.2. Courts of general jurisdiction ...................................................................................................................110

17.2.1. Competence .................................................................................................................................................110


17.3. Economic courts.............................................................................................................................................111

17.3.1. Jurisdiction of economic courts ............................................................................................................111

17.3.2. Terms of case consideration by courts considering economic cases in first instance .......111

17.3.3. Writ proceedings in economic courts .................................................................................................113

17.3.4. Appealing against economic court decisions ..................................................................................113

17.3.5. State fee rates .............................................................................................................................................113

17.4. Arbitration ........................................................................................................................................................113

17.4.1. The IAC competence ................................................................................................................................114

17.4.2. Appointment of arbitrators.....................................................................................................................114

17.4.3. Term of dispute resolution in the IAC................................................................................................115

17.4.4. Law applicable to the substance of a dispute.................................................................................115

17.4.5. Appealing against the IAC award........................................................................................................115

17.4.6. Procedure for enforcement of the IAC award .................................................................................115

17.4.7. Arbitration costs in the IAC....................................................................................................................115

18. Bankruptcy .....................................................................................................................................116

18.1. Initiation of bankruptcy proceedings.....................................................................................................117

18.2. General provisions on bankruptcy ..........................................................................................................117

18.3. Priority of creditors.......................................................................................................................................118

18.4. Contestation of debtor's transactions....................................................................................................118

18.5. Responsibility of persons controlling a debtor ..................................................................................118

19. Contact details of the Government bodies ................................................................................119

19.1. The Ministries of the Republic of Belarus............................................................................................120

19.2. State Committees of the Republic of Belarus....................................................................................120

19.3. Bodies of local government ......................................................................................................................221


About Belarus1

11Doing Business in Belarus 2017 About Belarus

Natural resources:

Potassium salts, wood, peat,

granite, dolomite, limestone, clays,

sand, minor oil and natural gas fields.

Travel corridors:

The country is crossed by two

trans-European transport corridors

designated according to the

international classification as No. 2

(East-West) and No. 9 (North – South)

with a 9b branch.

§ Transport corridor No. 2

Berlin—Warsaw—Minsk—Moscow—

Nizhny Novgorod crosses Germany,

Poland, Belarus and Russia.

§ Transport corridor No. 9

crosses Finland, Russia, Belarus,

Ukraine, Moldova, Romania, Bulgaria

and Greece.

1.2. EconomyBelarusian economy is based on

the socially oriented economic

model.

Centralized distribution and

planning are used in terms of

macroeconomic indices only.

The country’s major industries

are energy production, machine

engineering, agriculture, chemical

and forest industry, construction and

production of construction materials,

extractive industry.

GDP in 2016 year ≈ $ 48.2 bln.

External trade

Principal exports are oil prod-

ucts and petroleum, potassium and

nitrogen fertilizers, metal products,

motor trucks, tractors, man-made

fibres and yarns, tyres, milk and meat

products, sugar.

Major imports are energy re-

sources (petroleum and natural gas),

primary products, materials and parts

(metals and metalware, raw material

for chemical production, machine

parts), technological equipment.

Official name: Republic of Belarus.

Short name: Belarus.

Territory: 207,600 sq. km (84th in the world).

Geographic position: located in Eastern Europe. Borders on

Russia, Ukraine, Poland, Lithuania and Latvia.

State languages: Belarusian, Russian.

National currency: Belarusian rouble (BYN).

Population: 9,498,700 (as of 1 January 2016). Urban

population – 77.3%.

Ethnicities: Belarusians – 83.7%, Russians – 8.3%, Poles –

3.1%, Ukranians – 1.7%, Jews – 0.1%, other – 3.1% (according

to 2009 census).

Capital city: Minsk (1,959,900 inhabitants as of 1 January

2016).

Regions and regional centres (as of 1 January 2016):

• Brest region – 1,387,000 (Brest – 330.900);

• Vitebsk region – 1,193,600 (Vitebsk – 370,600);

• Gomel region – 1,422,900 (Gomel – 522,000);

• Grodno region – 1,050,200 (Grodno – 361,400);

• Mogilev region – 1,060,700 (Mogilev – 370,700);

• Minsk region – 1,417,400.

Belarus

Russia

Latvia

Lithuania

PolandUkraine

Employment and labour

compensation¹Total workforce 4,381,300

Unemployment

rate0.8% (35,300)

Average pay 392 EURO/month

10,41,7 1,3

86,6

џ Mining industry

џ Processing industry

џ Supply of electrical power,

gas, steam, hot water and

conditioned air

џ Water supply; waste control,

pollution control

Industrial production

pattern in 2016²

¹ As of December 2016

² Source: National Statistical Committee of the Republic of Belarus (belstat.gov.by)

Doing Business in Belarus 2017 12 About Belarus

3Main industries

15,2%

26,0%

13,2%

10,4%8,4%

7,6%

5,6%

6,0%

3,9%

3,7%

џ Production of food, beverages and

tobacco goods

џ Production of coak and petroleum

refinery products

џ Supply of electrical power, gas, steam,

hot water and conditioned air

џ Production of chemical goods

џ Production of rubber and plastic goods,

other non-metallic mineral products

џ Metallurgical production, production of

finished metal products, except for

machines and equipment

џ Production of machines and equipment

џ Production of textile goods, clothes,

leather goods and fur goods

џ Production of wood goods and paper;

printing and replication of recorded

media

џ Other

џ Mineral products

џ Chemical products

џ Machines, equipment and vehicles

џ Food and primary products for

food industry

џ Ferrous and non-ferrous metals

and products from them

џ Wood and paper-pulp products

џ Textile and textile products

џ Other

4Exports in 2016

22,0%

20,3%

7,8%

6,9%

17,3%

17,9%

3,4%

4,4%

џ Mineral products

џ Machines, equipment and vehicles

џ Chemical products, raw rubber

(incl. man-made fibres and yarns)

џ Food and primary products for

food industry

џ Ferrous and non-ferrous metals

and products from them

џ Textile and textile products

џ Other

15,0%

14,4%

9,1%

2,9%8,2%

28,0%

22,4%

5Imports in 2016

3 Source: National Statistical Committee of the Republic of Belarus (belstat.gov.by)4 Source: National Statistical Committee of the Republic of Belarus (belstat.gov.by)5 Source: National Statistical Committee of the Republic of Belarus (belstat.gov.by)6 For January – November 2016

Key figures

37th of 190

Саа1

B-

B

98th of 149

31st of 175

0.798 (50th of 187)

99.7%

GDP

Real GDP growth rate

GDP per capita

Inflation rate6Export of goods and services6Import of goods and services

Profit tax*

VAT*

Income tax*

48.2 bln USD

97.4%

5,074 USD

10.6%

23.4 bln USD

27.6 bln USD

18%

20%

13%

Doing Business 2017

& World Bank research

Moody's credit rating

Standard & Poor's long-term credit rating

Standard & Poor's short-term credit rating

Legatum Prosperity Index 2016

ICT development Index 2016

Human Development Index 2015

Literacy rate

* special tax rates are provided by preferential

investment regimes

BusinessEnvironment2

There were 44,311 economic entities registered in the Republic of Belarus in 2016: 10,125

legal entities and 34,186 individual entrepreneurs, including¹:

*applies to legal entities only

**applies to local community associations (trusts) and law offices only

14Doing Business in Belarus 2017 Business Environment

2.1. Business entitiesThere are no specific require-

ments for foreigners wishing to run a

business in Belarus. Investors,

whether they are residents of the

Republic of Belarus or any other

country, fall within the same legal

treatment and exercise equal rights

to run a business in Belarus by means

of formation of separate legal

entities. The procedure requires to go

through a number of the legal

formalities, particularly registration

into the Uniform State Register of

Legal Entities and individual

entrepreneurs.

Legal entities are required to

have their own name, the statutory

fund (the formation of which, unless

otherwise established by legislative

acts, is allowed for one year from the

date of the state registration of a

legal entity, as well as the minimal

amount of which is established for

certain forms of business entities by

legislation), management, registered

offices and bank accounts.

Legal entities registered in

Belarus are subjects of the Belarusian

law, but agreements concluded by

Belarusian companies with foreign

companies may be governed by the

law chosen by the parties.

The Belarusian legislation

provides for the following legal

forms of business entities:

§ Individual entrepreneur (the

abbreviation is IE);

§ Farm enterprise (peasant

economy) (the abbreviation is FE);

§ Unitary enterprise (the

abbreviation is UE);

§ Production cooperative (the

abbreviation is PC);

§ General Partnership (the

abbreviation is GP);

§ Special Partnership (the

abbreviation is SP);

§ Additional-liability company

(the abbreviation is ALC);

§ Limited-liability company (the

abbreviation is LLC);

§ Open joint-stock company

(the abbreviation is OJSC);

§ Closed joint-stock company

(the abbreviation is CJSC).

The other forms of doing

business are establishment of

representative offices and branches

of legal entities.

Most of businesses in Belarus

are legal entities, organized in forms

of UE, LLC, ALC, CJSC and OJSC, as

the most favourable forms to perform

business activities. Only the citizen of

the Republic of Belarus or foreigner

having a special permission to stay in

the Republic of Belarus are entitled

to be registered as individual

entrepreneurs.

2.1.1. Private unitary enterprise

Private unitary enterprise is a

commercial organization not

endowed with the right of ownership

to property consolidated to it by the

owner. The founder is the owner of

the property of the private unitary

enterprise. One individual or one

legal entity can be a founder of the

private unitary enterprise. For the

unitary enterprise set up by an

individual the word "private” shall be

used in its name.

Property of a private unitary

enterprise is non-divisible and could

not be distributed to the contribu-

tions (the shareholder's shares or its

parts) as well as among employees of

the enterprise.

The founding document of any

private unitary enterprise is the

Charter. The main body of a private

unitary enterprise is a manager

(director), which is appointed by the

owner. The owner of the unitary

enterprise may be also a director at

the same time.

The powers of the director of

the private unitary enterprise may be

delegated contractually to another

commercial organization (the

management company) or to an

individual entrepreneur (an

executive manager) under the

decision of the owner.

The legislation does not

provide a minimal amount of

statutory fund for private unitary

enterprises. The amount of the

statutory fund is self-determined by

the owner.

A unitary enterprise incurs its

liabilities with all of the property

belonging to it and it is not liable for

obligations of its founder. The owner

of the private enterprise has his

subsidiary liability for the obligations

of the enterprise only if the economic

insolvency (bankruptcy) of enterprise

has been caused by his actions.

2.1.2. Limited Liability

Company

A Limited Liability Company is a

company with a number of share-

holders not more than fifty, whose

statutory fund is divided into shares

¹ http://minjust.gov.by/ru/egr/

Registering authorityLegal

entities

Brest region executive committee, Brest free trade zone*

Vitebsk region executive committee, Vitebsk free trade zone*

Gomel region executive committee, Gomel-Raton free trade zone*

Grodno region executive committee, Grodno-Invest free trade zone*

Minsk municipal executive committee, Minsk free trade zone*

Minsk region executive committee

Mogilev region executive committee, Mogilev free trade zone*

National Bank, Ministry of Finance, Ministry of Justice and its

Main Department **

Individual

entrepreneurs

888

657

757

584

4650

1602

839

148

4335

3048

3882

3624

10142

5606

3549

-

of certain sizes that are stated in the

founding documents. One member

(either private individual or legal

entity) can found the Limited

Liability Company.

The legislation does not

provide a minimal amount of

statutory fund for the Limited

Liability Company. The amount of the

statutory fund is self-determined by

the founders.

The founding document of the

Limited Liability Company is the

Charter approved by the founders.

A Limited Liability Company

incurs its liabilities with all of the

property belonging to it.

A Limited Liability Company is

not liable for obligations of its

participants, with the exception of

cases provided for in the legislative

acts or its Charter.

Participants of a Limited

Liability Company are not liable for

his obligations may face downside

risks related to the Company

activities within the limits deter-

mined by the amount of their

contributions into the Statutory fund

of the Company.

Participants of a Limited

Liability Company made their

contributions not in full jointly and

severally bear responsibility for the

obligations within the limits of the

unpaid part of contributions made by

all the participants of the Company.

Organized structure of the

Limited Liability Company includes:

a) General Meeting of

Shareholders

The General Meeting of

Shareholders is the supreme

authority of the Limited Liability

Company that takes the most

important decisions on the com-

pany's activity. If the limited Liability

Company consists only from one

shareholder the General Meeting of

Shareholders is not conducted. This

shareholder exercises authorities of

the General Meeting of Shareholders.

b) Board of Directors or

Supervisors.

The Board of Directors

(Supervisory Board) is formed in case

its formation is described by the

company's Charter.

c) Executive Body – Sole

Director or Administrative Board

(Directorship).

The powers of the executive

body may be delegated contractually

to another commercial organization

(the management company) or to an

individual entrepreneur (an

executive manager) under the

decision of Shareholders of General

Meeting of the company.

d) Inspector or Inspection

Commission – the control authority

of the company.

The Board of Directors

(Supervisory Board), Executive Body

and Inspection Commission are

placed under the responsibility of the

General Meeting of Shareholders or

of the one shareholder.

2.1.3. Additional liability

company

An Additional Liability Company

is a company with the number of

shareholders not more than fifty,

which statutory fund is divided into

shares of certain sizes that are stated

in the founding documents. With

regard to the Additional Liability

Company, the same rules and

regulations established by the

legislation for Limited Liability

Company (the founding document,

the number of participants, the size

of statutory fund, organized structure,

etc.) are applied.

The only difference between an

Additional Liability Company and a

Limited Liability Company is that

shareholders of an Additional

Liability Company jointly and

severally bear subsidiary responsibil-

ity for the obligations of the

Additional Liability Company with

their property within the limits

determined by the Charter of the

company, but not less than the

amount established by the legislative

acts, in proportion to the contribu-

tions of participants in the statutory

fund of the Additional Liability

Company. The Charter of the

Additional Liability Company may

establish a different procedure for

distribution of additional responsi-

bility among its participants.

At present, the minimum size of

the subsidiary responsibility of the

Additional Liability Company shall be

not less than the amount equivalent

to 50 basic units².

2.1.4. Closed joint-stock

company

The number of shareholders in

the Closed Joint Stock Company

cannot be more than fifty. A minimal

amount of the statutory fund for the

Closed Joint Stock Company is 100

base units.

The statutory fund is divided

into a number of shares of the equal

nominal value.

The founding document of the

Closed Joint Stock Company is the

Charter.

The organized structure of the

Closed Joint Stock Company includes

the same elements as the organized

structure of the Limited Liability

Company.

Shareholders are not liable for

its obligations and may face

downside risks related to the

Company activities within the limits

of the value of their shares.

A shareholder may alienate its

own shares to the third parties

and/or to limited audience, desig-

nated by the Company, only with the

consent from other shareholders.

A Closed Joint Stock Company is

not entitled to carry out a public

subscription to the stocks issued by it

or in any other way offer it for the

purchase to an unlimited audience.

2.1.5. Open joint-stock

company

The number of shareholders in

Doing Business in Belarus 2017 15

² The amount of the basic unit is established by the legislation of the Republic of Belarus. From the first of January 2017 it is 23 Belarusian rubbles

and approximately equals 11 Euro. Hereinafter the term “basic unit” is not transferred to Euro unless otherwise stipulated.

Business Environment

the open joint-stock company is not

limited by minimal or maximum

number of members.

The minimum amount of the

statutory fund for open joint-stock

companies is 400 basic units.

The statutory fund is divided

into a number of shares of the equal

nominal value.

The founding document of an

open joint-stock company is the

Charter.

The organized structure of the

open joint-stock company includes

all the same elements as the

organized structure of a limited-

liability company. However, forma-

tion of the Board of Directors

(Supervisory Board) of the open joint-

stock company is obligatory as

required by the Law, if the number of

its shareholders is more than 50.

Shareholders are not liable for

the obligations of the open joint-

stock company and may face

downside risks related to the

Company activities within the limits

of the value of their shares.

A shareholder may alienate his

shares to the unlimited audience

without the consent from other

shareholders.

An open joint-stock company

has the right to carry out a public

subscription of the shares issued by it

and its free sale on the terms

established by the legislation.

An open joint-stock company is

entitled to conduct open subscrip-

tion for emitted shares or open sale

of additional shares according to the

procedure and terms stipulated by

the securities legislation as well as

closed placement of additional

shares if the additional shares are

placed at the cost of its capital and

(or) the cost of shareholders and in

other cases stipulated by the legal

acts.

2.1.6. Representative offices

and branches of business entities

A representative office is a

subdivision of an organization

located in the territory of the

Republic of Belarus, safeguarding

and representing interests of a


foreign organization and exercising

other functions that are not contrary

to the legislation.

A branch is a subdivision of an

organization which is out of the

territory of its location, exercising all

or part of its functions, including the

functions of representation.

Representative offices and

branches are not legal entities and

they operate on behalf of a legal

entity, which has created them. A

representative or branch manager

shall act under the power of attorney.

The property of representative

offices or branches is taken into

consideration separately to the

balance of the legal entity, which has

created these representative offices

or branches.

The Belarusian legislation does

not allow foreign legal entities to

establish branches, that is why

foreign organizations have the right

to establish in the Republic of

Belarus only autonomous structural

subdivisions in the form of represen-

tative offices.

The details on how to carry out

business through the representation

office are described in the part 2.2

hereinafter.

2.1.7. Procedure of registration

of commercial entities in the

Republic of Belarus (see table 2.1.7 on

next page)

2.1.8. Expenses on registration

of commercial organizations and

representative offices ( see table 2.1.8

below)

2.1.9. Business liquidation and

reorganization

Liquidation of a company may

be carried out voluntarily by the

decision of the owner of the company

or shareholders (the sole share-

holder) and in other cases as

prescribed by law (by economic court

or by state registering authority).

The owner (shareholders) or

body of a company empowered by the

Charter takes a decision on liquida-

tion of a company, appoints the

liquidation commission (appoints the

liquidator), who are responsible for

the implementation of all the

formalities associated with the

liquidation process and establish the

procedure and terms of the liquida-

tion.

It should be noted that the

maximum term in which a business

entity can stay in liquidation process

is 9 months from the date of the

making decision on the liquidation

with a right to extend this term to 12

months.

Business reorganization in

Belarus can be realized in the form of

consolidation, merger, division,

separation and transformation.

2.2. Ways of doing business

by foreign organizations and

individuals in the territory of

the Republic of BelarusForeign investors can choose

one of two following ways of doing

business in the Republic of Belarus:

a) individual entrepreneurs

and legal entities:

§ establishment of a legal entity

in one of the above listed forms. The

statutory fund of a commercial

organization shall be declared in the

Belarusian rubles. The foreign

investors are entitled to make

contribution to the statutory fund in

foreign currency, but at the moment

of declaring the statutory fund in the

corporate documents the contribu-

tions shall be recalculated to the

Belarusian rubles at the official rate

stated on the date of their real

transfer;

b) legal entities

§ doing business through

permanent representative office in

the territory of the Republic of

Belarus.

2.2.1. Doing business through


Belarus

Doing business through


Belarus, according to the Tax Code of

the Republic of Belarus, means doing

business by virtue of:

§ permanent establishment

through which a foreign organization

is eligible either totally or partially to



2.2.2. Implementation of

activity through a permanent

establishment in the Republic of

Belarus

As a rule, it means an entrepre-

neurial or other activity of a foreign

organization affiliated with:

§ Execution of works and

rendering services in construction,

installation, assembly, adjustment,

maintenance and operation of

equipment (other property),

computer programs stipulated by an

agreement (agreements);

§ Sale of goods from ware-

houses located in Belarus;

§ Execution of works and (or)

rendering of services in the Republic

of Belarus;

§ Doing other business not

prohibited by law.

At the same time a foreign

company is a subject for tax registra-

tion for permanent establishment in

the Republic of Belarus.

The legislation of the Republic

of Belarus states certain period

during which an activity of a foreign

organization implemented through

the permanent establishment in the

Republic of Belarus is recognized as a

permanent establishment. However

if there are other terms stipulated by

an international treaty of the

Republic of Belarus, the international

treaty norm is applied.

As a general rule, the recogni-

tion of places of works execution or

rendering services as a permanent

establishment under the legislation

of the Republic of Belarus is eligible

only during 90 days of either

continuous or collectively doing

business in any of 12-month period

starting and finishing in specified tax

period.

However, the construction site,

installation or assembly object is

recognized as a permanent establish-

ment of a foreign organization, if this

site or object is located on the

territory of the Republic of Belarus

during more than 180 days in any

twelve-month period extended from

the beginning to the end of the fiscal

period.

The construction of new

objects, reconstruction (moderniza-

tion), expansion, re-engineering and

(or) repair of existing real estate

objects (except for aircrafts and ships,

inland waterways crafts and space

objects), as well as the construction

site and (or) installation, repair and

reconstruction (modernization),

expansion and (or) re-engineering of

structures, machinery and equip-

ment, which requires a rigid

attachment to the footing or to the

buildings blocks of the capital

structures (buildings) are understood

under the construction site, installa-

tion or assembly object of a foreign

organization in the Republic of

Belarus.

The following issues are not

included during the construction site,

installation or assembly object life

span determination:

§ The time on the object

designing by the other foreign

organizations outside the Republic of

Belarus;

§ The time spent by the

contractor on the other construction

sites and (or) objects not related to

the construction site and (or) object.

2.2.3. Doing business through

the dependent agent

Another way of doing business

by foreign organizations in Belarus is

operating through the dependent

agent – a Belarusian organization or

individual entrepreneur under the

agency contract.

Dependent agent is a legal

entity or individual, operating on

behalf and/or in favor of foreign

organization and/or authorized to

conclude contracts or negotiate on

essential terms of contracts.

According to the Tax Code of the

Republic of Belarus, doing business

through the dependent agent is

considered as operating through

permanent representative office for

the purposes of taxation. That is why

a foreign organization, operating

through the dependent agent, is

obliged to pay tax on profit, gained in

Belarus. Taxes of a foreign organiza-

tion are to be paid by the agent at

1. Taking by the founders

(founder) a decision on the

creation of the organization in

the Republic of Belarus

2. Choice of the legal form of

organization

4. Search for premises, where

the newly created commercial

organization will be located

(legal address)

5. Formation of the governing board,

approval and signing the documents

of newly created commercial

organization by its founders

3. Mutual approval of a company's

name

6. Filing of documents for the

registration agency and the state

7. Production of the seal of the

commercial organization

8. Legalization of employment

relations with the director and the

chief accountant of the commercial

organization

9. Opening of a bank account

10. Entry into the agreement on

depositary and advisory service.

Registration of shares in the

authorized government body

Additional step for CJSC /

PJSC and commercial

organizations

Registration of commercial

entities in the Republic of

Belarus (2.1.7)

perform an entrepreneurial or other

activity in Belarus;

§ agent (organization or

individual, operating on behalf

and/or in favor of the foreign

organization).



2.1.8. Expenses on registration of commercial

organizations and representative offices


17-20 EuroMaking a seal

Legalization, translation

into Russian of the power of

attorney in the name of the

person authorized to carry

out activities concerning the

opening of the

Representative Office,

notarization of the

translator's signature (2

copies)

1 page of translation into Russian is

6-27 Euro depending on the

language.

Notarization of the translator's

signature is 6 Euro.

6 Euro (if the document with the

translation is less than 10 pages), 7

Euro (the document with the

translation is more than 10 pages).

Making a seal 17-20 Euro

1 page of translation into Russian

is 6-27 Euro depending on the

language.


signature - 6 Euro (if the document

with the translation is less than 10

pages), 7 Euro (the document with

the translation is more than 10

pages).



language.


signature is 6 Euro.



language.


signature is 6 Euro (if the

document with the translation is

less than 10 pages), 7 Euro (the


more than 10 pages).

The minimum statutory fund is not

established.

Exceptions:

CJSC – 1125 Euro;

JJSC – 4499 Euro.

11 Euro

Action

Legalization, translation of

an extract from the

Commercial Register of the

foreign state into Russian

and notarization of the

translator's signature (if the

incorporator is non-

resident)

Cost Action Cost

Notarization of the

provisions of

Representative Office

Notarization of the provisions - of

Representative Office

6 Euro (if the document with the

translation is less than 10 pages),

7 Euro (the document with the

translation is more than 10 pages).

Registration of a Representative OfficeRegistration of a commercial organization

Translation of the personal

identification document into

Russian and notarization of

the translator's signature


an extract from the

Commercial Register of the

foreign state into Russian

and notarization of the

translator's signature (2

copies)



language.

Notarization of a signature of the

translator is 6 Euro (if the






the power of attorney into


the translator's signature

(In case of transfer of

powers)


founding documents of a

foreign organization into


the translator's signature (2

copies)

1 page translation into Russian is 6-

27 Euro depending on the

language.


signature is 6 Euro (if the document

with the translation is less than 10

pages), 7 Euro (the document with

the translation is more than 10

pages).

Formation of the statutory

fund of the commercial

organization

The state duty for the

permission on opening of a

Representative Office (for 3

years)

2 194 Euro.

The state duty for the state

registration of the

organization


the power of attorney in the

name of the head of the

Representative Office into

Russian, the translator's

signature notarization (2

copies)



language.


signature is 6 Euro (if the






place of its tax registration.

If the agent operates in the

frameworks of its ordinary course of

business (independent agent or

agent with independent status), it is

not recognized as permanent

representative offices for the

purposes of taxation. The agent acts

in the frameworks of ordinary course

of business if it operates independ-

ently without instructions and

control, made by a foreign organiza-

tion and if business risk for the

results of its activity lies on the agent

and not on the foreign organization

which it represents. In such case a

foreign organization does not pay the

tax on profit, but pays tax on income

of foreign organizations that does

not carry out activity by through the

permanent representative office.

According to Belarusian

legislation it is required to obtain

special permissions (licenses) in

order to perform certain types of

activities. So, it is impossible to

perform licensed activities by the

agent because of this rule.

Provisions, stipulating

exclusivity of relations under the

agency contract with participation of

a Belarusian person, are unlawful

according to the Belarusian legisla-

tion. The contract conditions,

providing refusal of contracts with

other suppliers or purchasers do not

correspond to Belarusian legislation

and may be invalidated under the

Belarusian law.

2.2.4. Establishment of a

representative office in Belarus

Any foreign organization is

eligible to establish its representa-

tive office in the Republic of Belarus.

It does not presuppose the perfor-

mance of an entrepreneurial activity

in Belarus and as a rule it is needed

exclusively for performance of

representative functions and (or)

preparation for doing business in the

Republic of Belarus. However if any

evidences of the permanent

representative office are found in

activities performed by the foreign

organization for taxation purposes

(works execution, rendering services,

1. Adoption of a decision on liquidation by shareholders (property owner),

an appointment of a liquidator.

2. Notification of employees about the impending dismissal

in connection with liquidation.

4. Notification of a bank, re-registration of bank accounts

in the name of a liquidator (if there will be necessary

to make transactions on the bank accounts).

5. Making of a list of creditors. Notice of the creditors about the liquidation.

6. Publishing of a notice about the liquidation in special printing or in electronic

format on the official site of a special printing.

9. An inventory of assets. Drawing up and approval of the interim liquidation

balance sheet. Provision of the interim liquidation balance sheet to the tax

authority.

11. An inventory of assets. Drawing up and approval of the liquidation balance

sheet. Provision of the liquidation balance sheet to the tax authority.

13. Submission of documents to the registration authority to exclude

the organization from the Unified State Register

of Legal Entities and Individual Entrepreneurs (USR).

Liquidation of business entities in the Republic of Belarus

3. Submitting an application for liquidation to the registration authority.

The registration authority shall notify tax authorities, social security authorities,

organization on social and retirement insurance, mandatory accident insurance

during the performance of employment duties and occupational diseases.

7. Dismissal of employees and making payments to them.

8. Carrying out of inspections by the state authorities.

10. Payments to creditors in order of priority established by law. Distribution of

property that remains after making payments to the creditors between the

company's shareholders (transfer to the property owner).

12. Transfer of documents related to the activity of the company to the archive.

14. Obtaining of an extract from the decision of the registration authority to

exclude organizations from USR. Provision of the extract into the bank in order to

close bank accounts of the organization.


selling goods conformed to the

requirements above), the organiza-

tion will pay taxes in Belarus under

the rules applied to the performance

of entrepreneurial activities through

the permanent representative office.

Representative offices of

foreign organizations are established

and operate in Belarus in accordance

with the permission, given by the

Ministry of Foreign Affairs of the

Republic of Belarus.

The representative office:

§ is not recognized as legal

entity by the Belarusian law;

§ is not eligible to perform an

entrepreneurial activity.

Representative office of foreign

noncommercial organization can be

opened only for the implementation

for and on behalf of the foreign

organization of:

§ social support and protection

of citizens, including an improve-

ment of financial position of poor,

social rehabilitation of the unem-

ployed, the disabled and other

persons who because of their

physical or mental abilities or other

circumstances are not able to

exercise their rights and legitimate

interests;

§ preparation of population for

the prevention of accidents,

industrial accidents, a dangerous

situation which has man-made

nature, natural hazard, natural or

other disasters, social, ethnic and

religious conflicts and provision of

support in dealing with its conse-

quences, as well as to the victims of

repression, refugees and internally

displaced persons;

§ assistance in:

peace, friendship and harmony

among nations, prevention of social,

ethnic and religious conflicts;

strengthen the prestige of the

family in the society;

protection of motherhood,

fatherhood and childhood;

activities in the field of

education, science, culture, art,

education, personal development;

activity in the prevention and

protection of public health, as well as


the promotion of healthy lifestyles,

improving the morale of the citizens;

activities in the sphere of

physical culture and sports;

§ environmental and animal

protection;

§ protection and maintenance

of buildings, structures, and other

objects and areas of historical,

cultural, religious or environmental

value, and burial places;

§ other socially useful activity.

In order to promote interna-

tional cooperation in the field of

education, including the conclusion

of agreements on cooperation

between organizations of system of

education of the Republic of Belarus

and foreign educational organiza-

tions, to study an experience of

system of education of the Republic

of Belarus, to facilitate the exchange

of experience and information in the

field of education and science,

realization of advertising and

information work in covering the

educational activities of foreign

educational organizations can be

opened representative offices of

foreign educational organizations.

Representative office of foreign

commercial organization can be

opened, unless otherwise stipulated

by international treaties of the

Republic of Belarus, or legislative

acts of the Republic of Belarus, only in

the aims of realization of preparatory

and auxiliary nature activity for and

on behalf of the foreign organization,

including:

§ furthering of implementation

of international treaties of the

Republic of Belarus on cooperation in

economy, trade, finance, science and

technology, transport, seek opportu-

nities for its further development and

improvement of such cooperation, an

establishment and expansion of the

exchange of economic, commercial,

scientific and technical information;

§ research of commodity

markets of the Republic of Belarus;

§ explore opportunities for

investment in the Republic of

Belarus;

§ creation of commercial

organizations with foreign investors;

§ realization of tickets and seat

reservation of air, rail, road and sea

transport;

§ other socially useful activity.

2.3. Labour relations and

working conditions2.3.1. Information on the labour

market

According to the official

statistics, in November 2016 the

employed population size was 4

383,3 thousand people.

The number of the unemployed,

registered in the bodies of labour,

employment and social protection of

the population by the end of

November 2016 was 35,8 thousand

people.

The level of the registered

unemployment for the end of

November 2016 was 0.8% of the

economically active population.

2.3.2. Legal regulation of labour

and related to them relations

This sphere of relations is

primarily regulated by the Labour

Code of the Republic of Belarus.

Moreover, there are many other acts

of legislation that settle more

specific issues.

According to the Labour Code,

an employment contract should be

concluded in the written form. The

obligatory conditions that must be

included in the provisions of the

contract are also stipulated by the

Labour Code.

The highest state authority that

is responsible for the public policy of

labour and employment of the

population is the Ministry of Labour

and Social Protection of the Republic

of Belarus.

2.3.3. Schedule of work and rest

Schedule of work is the order of

distribution of norms of daily and

weekly working and rest hours during

a day, a week, a month and during

other calendar periods by the

employer for the employees.

The schedule of work of the

employees is developed on the basis

of the schedule of work, applicable by

the employer.



The schedule of work is

determined by the internal work

order regulations or by the work

schedule (shift schedule).

Standard working time cannot

be more than 40 hours per week. For

certain categories of employees the

reduced working time is established.

Working week is with 5 or 6 working

days with common weekend on

Sunday. The normal working day is

eight hours with a one-hour lunch

break. There are specific norms that

regulate night work, work in

weekends and holidays, labour of

juveniles etc.

Employers are obliged to

provide the employees' guarantees

for work in weekends and holidays,

for work during the night time as well

as guarantees and compensations,

provided for by the labour legislation.

Any overtime work should be paid

extra.

Employees are entitled for

labour and social holidays providing

the presence of the grounds,

stipulated by the Labour Code of the

Republic of Belarus, during which the

average salary, so called “vacation

allowance”, is saved for the employee

and is calculated according to the

order, established by the Government

of the Republic of Belarus or by the

empowered body.

The minimum period of annual

holiday is 24 days. The labor contract

shall be deemed invalid, if less than

24 days of annual holiday is specified

by such contract, as such contracts

shall not contain the provisions,

worsening employee's job conditions

in comparison with legislation.

In addition, there are public

holidays that are non-working:

џ 1 January – New Year;

џ 7 January – Orthodox Christmas;

џ 8 March –Women's Day;

џ according to Orthodox calendar

– Radunitsa;

џ 1 May – Labour Day;

џ 9 May – Victory Day;

џ 3 July – Independence Day of the

Republic of Belarus (Republic

Day);

џ 7 November – Day of October

Revolution;

џ 25 December – Catholic

Christmas.

2.3.4. Payment for labour

Commercial organizations and

individual entrepreneurs are free to

determine themselves the wages

payment conditions, taking into

account the complexity of work, skills

of workers, working conditions and so

on. At the same time the Unified Wage

Scale of the Republic of Belarus may

be applied in the establishment of

wages payment conditions, though

its application is not obligatory.

Therefore the entities of entrepre-

neurial activities have the right to

choose any system of wages payment

for employees, both with the

application of the Unified Wage Scale

and without it. In commercial

organizations the wages are usually

paid for employees on the basis of

the local normative legal acts,

adopted by such organizations.

The minimal amount of wages

is determined by the state (265

Belarusian rubles as for 01.01.2017)³,

however, the maximal amount of

wages are not limited. Wage

payments are included in the cost of

production and sales of goods (works,

services) and are also counted in the

price formation and taxation.


3 As of 01.01.2017 the official rate of the Belarusian ruble to EURO is 2,0450 Belarusian rubles.4 Source: National Statistical Committee of the Republic of Belarus (belstat.gov.by)

Data communication

Financial and insurance activity

Professional, scientific and technical activity

Transportation, storage and courier service

Industry

Construction

the Republic of Belarus

Wholesale and retail trade;

auto and moto service

Health service

400 700 1000 1300 1600 1900 2200

2 167,6

1 289,2

1 001,1

793,0

774,5

764,0

722,0

695,0

591,0

560,5

554,9

541,9

540,3

510,7

507,6

100

AVERAGE NOMINAL ACCRUED WAGE OF

THE EMPLOYEES OF THE REPUBLIC OF BELARUS4

ON SELECTED TYPES OF ECONOMIC ACTIVITY IN 2016

Real estate operations

Creativity, sport and rest activities

Administrative and support services activity

Temporary accommodation

and nutrition services

Education

Agriculture, forestry and fishing industries


2.3.5. Local acts in the sphere of

labour relationsAccording to article 1 of the

Labour Code of the Republic of Belarus, local normative legal acts are collective contracts, agreements, internal labour regulations and other normative acts of the specific employer, adopted according to the established procedure and regulat-ing labor and related to them relations. Thus, it can be concluded that local normative legal acts regulate relations among employees and between employees and an employer.

For example, the local norma-tive legal acts, regulating the labor policy are provided for in the art. 194 of the Labour Code:

1) rules for internal labor order, collective contracts, agreements, internal labour regulations and other local normative legal acts;

2) schedules of positions and salaries;

3) employment position descriptions;

4) working schedules (shift schedules);

5) schedules of holidays.According to the Labour and

other legislation of the Republic of Belarus business entities irrespective to the types of activities performed shall maintain labour protection documents.

The Labour Code establishes that local normative legal acts should not worsen the conditions of employees in comparison with labour and other legislation of the Republic of Belarus, regulating the corresponding relations in the social-labor sphere.

All labour and other relations shall be properly governed through the development and approval of the relevant local regulative acts of the enterprise in order to comply with legislation and prevent the negative situation with employees.

2.4. Labor migration2.4.1. Entry into the territory of

the Republic of Belarus to perform

labour activities

As a general rule, the entry of

foreigners into the territory of

Belarus can be realized only after

obtaining visas of the Republic of

Belarus.

There is no requirement for

obtaining work purpose visas for

citizens of Azerbaijan, Armenia,

Georgia, Kazakhstan, Kyrgyzstan,

Russian Federation, Moldova,

Uzbekistan, Tajikistan, Turkmenistan,

Ukraine and Ecuador.

Visa-free entry is also set for the

citizens of Venezuela, Cuba, Serbia,

Israel, Qatar, Macedonia, Mongolia,

Turkey, Montenegro, Macao Special

Administrative Region. But if the

citizens of these countries are

planning to carry out labour,

commercial or other income-

generating activities in the Republic

of Belarus, they are obliged to obtain

a visa in advance.

As from 12 February, 2017,

citizens of 80 states, as listed in the

annex to Presidential Edict No. 8

dated 11 January, 2017, are entitled to

visa-free entry/departure in/from

Belarus at the Minsk National Airport

border station for not more than 5

days (without any additional

registration with Belarusian

migration authorities). Almost all EU

countries, USA, Japan and other

states are on the list. These measures

are targeted at spurring travels by

foreign businessmen, investors,

tourists and individuals to Belarus.

To perform labour activities in

the Republic of Belarus a foreigner

can get the following types of entry

visas:

1. C (short-term visa “work”).

This type of entry visa is issued

on the basis of one of the following

documents:

§ a copy of a special permit for

labour activity in the Republic of

Belarus for a foreign citizen or

stateless person notarized by a public

notary of the Republic of Belarus

(hereinafter – the special permit);

§ a notification made by the

subdivision of citizenship and

migration of issuing a special permit

to a foreigner, who entered the

foreign establishment through the

channels of departmental email of

the Ministry of Foreign Affairs

(hereinafter - the MFA).

2. D (long-term visa “work”).

This type of visa is issued to

citizens of migration welfare states

on the basis of an original petition of

a business entity of the Republic of

Belarus or of a representative office

of a foreign company in the Republic

of Belarus (including banks) and one

of the following documents:

§ a copy of the special permit

certified by a Belarusian notary;

§ a notification made by the

subdivision of citizenship and

migration of issuing a special work

permit to a foreigner, who entered

the foreign establishment through

the channels of departmental email

of the MFA.

However, a foreigner can enter

Belarus having any other visa, but

then he must obtain a multiple exit-

entry visa in the subdivision of

citizenship and migration (providing

a foreigner has a temporary resi-

dence permit).

In some cases, foreigners can

obtain a long-term visa type D

(business contacts). This kind of visa

is issued to maintain business

relations on the basis of the

agreement between the Belarusian

legal entity and a foreigner or foreign

organization where he works, which

confirms the presence of stable

business relations of the parties. This

visa may be also obtained by foreign

nationals working in the staff of a

representative office of a foreign

organization.

Visas are issued by diplomatic

missions and consular offices of the

Republic of Belarus. A multiple exit-

entry visa is issued by the subdivision

of citizenship and migration at the

place of residence of a foreigner in

Belarus.

Citizens of states where there

are no diplomatic missions and

consular offices of the Republic of

Belarus apply for visa to the General

Consular Department of the Ministry

of Foreign Affairs of the Republic of

Belarus and bodies of border guard of




2.4.2. Stay in the territory of the

Republic of Belarus

All the foreigners arriving in

Belarus must register upon actual

place of residence in the domiciliary

body of internal affairs within 5 days

except for Sundays and holidays.

International agreements of the

Republic of Belarus can provide

longer terms of stay in the Republic of

Belarus without registration in the

domiciliary body for certain catego-

ries of foreigners.

For example, the citizens of

Lithuania, Latvia, Russian Federation

and Ukraine, Republic of Kazakhstan

can stay in the territory of the

Republic of Belarus without

registration for 30 days from the day

of entry, the citizens of Russian

Federation - 90 days from the day of

entry. Citizens of the Republic of

Armenia and the Kyrgyz Republic,

members of their families may also

be in the Republic of Belarus without

registration for 30 days from the date

of entry, provided they conclude the

labour or civil contracts within 5 days

from the date of entry. In case of stay

in the territory of Belarus for more

than 30 days, they are bound to

register upon their place of residence

in the domiciliary body according to

the standard procedure.

Foreigners can temporarily stay,

temporarily reside or permanently

reside in the territory of the Republic

of Belarus.

All foreigners in the territory of

Belarus who do not have permission

for the temporal or permanent

residence are subject to the rules of

the regime of temporary stay in the

Republic of Belarus. The total term of

temporary stay of a foreigner in the


depends on the validity term of the

visa issued to him (her) and cannot

exceed 90 days a year.

International agreements of the

Republic of Belarus may provide

longer terms of temporary stay in the

Republic of Belarus without

obtaining permissions for temporary

or permanent residence for certain

categories of foreigners.

If a foreigner intends to stay in

Belarus for more than 90 days a year

(or longer than for the term deter-

mined by the international agree-

ment), he (she) will have to get

permission for temporary or

permanent residence.

The permission for temporary

residence is issued to foreigners who

entered Belarus for certain purposes,

including labour, business and other

activities. Decision on granting such

a permission is made by the body of

internal affairs at domiciliary place of

a foreigner.

The permission for permanent

residence gives foreigners the right

for permanent residence in the

Republic of Belarus. It is issued by the

Ministry of Internal Affairs and by

other bodies of internal affairs only

for certain categories of foreigners,

determined by legislation of the


2.4.3. Permission for labour

activity

Foreigners who do not have the

permission for permanent residence

in the territory of the Republic of

Belarus have the right for labour

activity after obtaining the special

permit and conclude a labour

contract.

Labour contract concluded with

a foreign citizen who does not have

permission for permanent residence

in the Republic of Belarus, shall

contain additional conditions, such

as: termination, amendment and

prolongation of the labour contract

in accordance with the requirements

of migration legislation; as well as

conditions of moving to the Republic

of Belarus, nutrition, residence,

medical service in the Republic of

Belarus. Labour contract is concluded

in written form in the Russian and/or

Belarusian language, and also in

native language or other language

known to the foreigner.

Special permit is granted to

employers with regard to their

foreign employees for one year.

Special permits will be granted for

two years period to highly skilled

workers. Those are foreign employ-

ees that are simultaneously

conforming to the two following

conditions:

§ they have a high level of

professional knowledge, skills and

expertise, confirmed by academic

credentials and employment

experience in the same occupation of

at least 5 years;

§ their monthly remuneration

shall exceed the fifteenfold amount

of minimum monthly emolument as

set out in the Republic of Belarus.

There is no need to receive

special permit for foreigners who:

1. have permissions for

permanent residence in the Republic

of Belarus;

2. are being employed accord-

ing to another procedure, provided

for by the international agreement of

the Republic of Belarus (for example,

citizens of the Russian Federation,

the Republic of Kazakhstan, the

Republic of Armenia, the Kyrgyz

Republic that are excluded from the

regulation on attraction and usage of

foreign labour force);

3. are employed as chief

executives of foreign entities'

representative offices;

4. graduate from a higher

education institution in the Republic

of Belarus and are immediately

employed according to their degree

and qualification;

5. have graduated from a higher

education institution in the Republic

of Belarus and are employed

according to their degree and

qualification within one year upon

their graduation and award of

qualification.

Foreign citizens who do not

have permissions for permanent

residence in the Republic of Belarus

can seek employment by themselves

or with the assistance of legal

entities, individual entrepreneurs

and foreign organizations that

render recruitment services.

However, citizens of Belarus and

foreign citizens, permanently

residing in Belarus, have the priority

right of employment.



Belarusian organizations that

employ more than 10 foreigners who

have no permissions for permanent

residence in the Republic of Belarus,

must receive permission for

employment of foreign labour force.

The category above does not

apply to foreigners who are highly

skilled workers and foreigners

engaged as chief executives of

entities created with their participa-

tion (as property owner, founder or

participant).

2.4.4. Responsibility for

migration legislation violation

There is administrative

responsibility in the Republic of

Belarus for violation of the legisla-

tion that regulates the issues

connected with attracting foreign

workers, in particular regarding:

§ managers of legal entities and

individual entrepreneurs who attract

foreign labour force with violation of

the established procedure – a

warning or a fine in the amount of up

to 20 base units;

§ managers of legal entities and

individual entrepreneurs, who

involve foreigners for work purposes

and who do not ensure their timely

registration, receipt of the permis-

sions for temporary residence in the

Republic of Belarus, exit of such

individuals from the Republic of

Belarus after the expiration of the

terms for their stay – a warning or a

fine in the amount of up to 20 base

units;

§ foreign citizens who violated

the order of staying in the territory of

the Republic of Belarus, including

those who break the established

order of the registration – a warning

or a fine in the amount of up to fifty

base units or deportation;

§ foreigners working without

special permits for labour activity in

the Republic of Belarus (a warning or

a fine in the amount of up to fifty base

units or deportation).

2.5. LicensingIn order to carry out certain

types of activities one needs to

obtain a special permit (license).

Licensing in the Republic of Belarus

is regulated by Edict of the President

of the Republic of Belarus as of

01.09.2010 No. 450 "On Licensing of

Certain Types of Activities" with

amendments specified by Edict of the

President of the Republic of Belarus

as of 03.06.2016 No. 188, which came

into force on 08.09.2016 (hereinafter

referred to as Edict No. 470).

At the moment, licensed types

of activities are as follows:

1. Advocatory activity;

2. Banking activity;

3. Veterinary activity;

4. Activity in the field of

automobile transport;


broadcasting;

6. Activity in the field of usage

of atomic energy and sources of

ionizing radiation;


industrial safety;


telecommunication;

9. Gambling activity;

10. Activity on the procure-

ment (purchase) of junk and refuses

of ferrous and non-ferrous metals;

11. Activity on providing fire

security;

12. Activity on rendering of

psychological aid;

13. Activity on design and

production of forms of securities and

documents with a certain degree of

protection, as well as documents

with a certain degree of protection

and special materials for protection

thereof from forgery;

14. Activity on technical and

cryptographic security of informa-

tion;

15. Activity connected with

influence on environment;


precious metals and precious stones;


cryptographic security of information

and means of surreptitious obtaining

of information;


transaction of narcotic substances,

psychotropic drugs and its precur-

sors;


health improvement of children

abroad;


control of radioactive contamination;


employment of citizens abroad,

gathering and distribution (including

the worldwide computer network

Internet) of data on individuals with

purpose of their acquaintance;


products of military purpose;


manufacture of alcohol, non-food

alcohol-containing products, non-

food ethanol and tobacco products;


service and civilian weapons and its

ammunition, collecting and

exhibition of weapons and ammuni-

tion;

25. Medical activity;

26. Educational activity;

27. Rendering of legal services;

28. Wholesale and retail trade

in oil products;

29. Wholesale trade and

storage of alcohol, non-food alcohol-

containing products, non-food

ethanol and tobacco products;

30. Security guard activity;

31. Polygraphic activity;

32. Professional and exchange

activities with securities;

33. Retail trade in alcoholic

drinks and (or) tobacco products;

34. Insurance activity;

35. Pharmaceutical activity;

36. Forensic expert activity.

Licenses are issued to legal

entities and individual entrepreneurs

of the Republic of Belarus, foreign

legal entities and organizations

established pursuant to the

legislation of foreign states provided

that there is a representative office

thereof in the territory of the

Republic of Belarus established

under the legislation, and also to

individuals (for carrying out

advocatory activity and collecting



and exhibition of weapons and

ammunition).

In order to obtain a license one

shall submit an application with

related documents to the state

licensing authority and pay a state

fee that as a rule amounts to 10 basic

units.

Such application is reviewed by

the licensing body within 15 working

days from the day of receipt of

documents. This term may be

prolonged for a period of evaluation

and (or) examination of compliance

of the applicant's capabilities with

license requirements and conditions,

but no longer than for 10 working

days.

Licenses are valid from the

effective date of the decision on its

issuance made by the licensing

authority. Since 01.03.2016 a validity

term of licenses has had no limit. All

special permits (licenses), which are

valid on the date of the official

publication of the latest changes to

Edict No. 450 (October 22, 2016), are

not limited by the term either. A

license is valid in the whole territory

of the Republic of Belarus or its part

indicated in such license, if the

legislation specifies that a license on

a corresponding type of activities is

valid in a certain part of the territory

of the Republic of Belarus indicated

in such license (e.g., activity in the

field of telecommunication). A type of

activities on which a license is issued

may be carried out only by a license

holder without transfer of a right to

carry out such activities to other legal

entity or individual. Separate

subdivisions may carry out a licensed

type of activity under a license issued

to a legal entity.

The information on entities

which have licenses is included in the

registers of licenses kept by the

licensing authorities. The informa-

tion from the register of licenses, as a

general rule, is public and may be

provided upon the applicant's

request.

Entrepreneurial activities

carried out without a license when

licensing is compulsory or with a

violation of rules and conditions of

carrying out types of activities

indicated in a license may act as a

ground for bringing to administrative

liability, while entrepreneurial

activities involving receipt of profit

on a large scale may act as a ground

for bringing to criminal liability.


Investment3

27Doing Business in Belarus 2017 Investment

Relations stemming from in-

vestment activities in the territory of

the Republic of Belarus are regulated

by the Law of the Republic of Belarus

“On investments” of 12.07.2013, regu-

latory legal acts of the President of

the Republic of Belarus, civil and

other legislation of the Republic of

Belarus, international treaties con-

cluded with participation of the

Republic of Belarus, and investment

agreements signed by the Republic of

Belarus.

3.1. General conditions for

investment In accordance with the Law on

investments, investment is any prop-

erty and other objects of civil law

rights which belong to the investor

on the basis of the ownership right,

other legal basis, and which the in-

vestor invests in the territory of the

Republic of Belarus in order to gain

profit (income) and/or achieve other

specific results or for other purposes

not connected with personal, family,

home and other similar use, in partic-

ular:

§ movable and immovable

property, including stocks, shares in

the authorized capital, shares in the

assets of the commercial organiza-

tion established in the territory of the

Republic of Belarus, monetary funds,

including moneys raised, including

loans and credits);

§ rights to claim with their cost

estimate;

§ other objects of civil rights

with an assessment of their value,

except for such types of objects of

civil rights, the availability of which is

not allowed in the circulation

(objects taken out from circulation).

Investments in Belarus may be

carried out by any means except for

prohibited by Belarusian laws. The

Law on Investments of the Republic

of Belarus specifies, in particular, the

following ways of investments:

1. creation of a commercial

organization;

2. acquisition, creation, includ-

ing through the construction of real

estate, except for the purchase or

construction by Belarusian citizens,

foreign citizens and persons without

citizenship, of houses, accommoda-

tion for residence of these citizens of

the Republic of Belarus, foreign citi-

zens and persons without citizenship

and (or) members of their families;

3. acquisition of rights to intel-

lectual property;

4. acquisition of stocks or shares

in the authorized capital, shares in

the property of a commercial organi-

zation, including cases of increase of

the authorized capital of a commer-

cial organization;

5. on the basis of the conces-

sion;

6. otherwise, except for cases

prohibited by legislation of the


3.2. Preferential investments

treatmentThere is the following number

of preferential investments treat-

ment in the Republic of Belarus²:

1. Industrial park “Great Stone”

The main preferences:

§ exemption from income tax,

property tax on objects, located

within the Park, the land tax for land

plots in the Park for 10 years from the

date of registration; in the next 10

years - 50% of the established rate;

§ deduction of the full VAT

charged on the acquisition (import)

of goods (works, services), property

rights, used to create the Park

facilities;

§ exemption from customs

duties on the import of goods

(manufacturing equipment, compo-

nents and spare parts and raw

materials) for the implementation of

the investment project in the Park,

including construction;

§ exemption from the compul-

sory foreign currency sales in the

domestic currency market of the

Republic of Belarus, resulting from

the activities in the park – till

01.01.2027;

¹ Source: National Statistical Committee of the Republic of Belarus (belstat.gov.by)

² The detailed information about preferential regimes is in the clause 10

Composition of investments by foreign investors into the

Belarusian real economy sector in 2016, by main investing

countries¹

Russia

33,0%

Cyprus

25,6%

Netherlands

6,5%

Lithuania

6,0%

China

3,3%

Austria

2,5%

Estonia

2,1%

Latvia

1,9%

Other

19,1%

§ reduced rate of income tax in

respect of employees' income

received from Park residents (9%

instead of 13%) – till 01.01.2027;

§ exemption from compulsory

insurance contributions with respect

to the portion of income of employ-

ees of Park residents, exceeding the

national average salary amount;

§ possibility to apply customs

procedure of free customs zone,

which stipulates the right to import

goods (raw materials), without

payment of customs duties and VAT

with their further processing and (or)

export outside the country-members

of the Customs Union EAEC without

paying customs duties.

2. High-Tech Park

Main preferences:

§ exemption from the income

tax;

§ exemption from VAT on

turnover from the sale of goods

(works, services, property rights) in


Belarus;

§ exemption from property tax

in respect of facilities located in the

Park, except for the objects under

lease;

§ exemption from offshore duty

when paying (transferring) dividends

to the founders (members) of the

resident, profit part, accrued to the

owner of resident's property;


duties on the import of goods for the

implementation of activities in the

IT-industry;


sory sale of proceeds in the foreign in

the domestic currency market of the

Republic of Belarus received from

activities in the IT-industry;

§ reduced rate of income tax in

respect of employees incomes

received from the residents (9%

instead of 13%);

§ compulsory insurance

contributions are not charged with

respect to the portion of income of

employees of Park residents,

exceeding the national average

salary amount.

3. an investment agreement

with the Republic of Belarus

Main preferences:

§ land plots renting out and/or

assigning for ownership without

holding of an auction;

§ exemption from fees for

treaty-making power in terms of land

rental agreements on landplots

rented out without auctioning for the

purpose of construction of facilities

as provided for by the investment

agreement;

§ exemption from import duties

(taking into account the international

obligations of the Republic of

Belarus) and VAT charged on import

into the territory of the Republic of

Belarus of the process equipment

(components and spare parts) to be

used in the territory of the Republic of

Belarus for implementation of the

investment project;

§ the right to deduct full

amount of VAT paid for the purchase

(import into the territory of the

Republic of Belarus) goods (works,

services), property rights, used for the

design, construction (reconstruction),

equipment facilities, stipulated by

the investment project.

4. free economic zones

Main preferences:

§ exemption from income tax

for the sale of own-produced goods

(works, services) within 10 years from

the date of income declared (for FEZ

residents registered after

31.12.2011; 5 years – for registered

not later than 31.12.2011); further

this tax is paid at a general rate

reduced to 50%, but no more than at

the rate of 12%;


on objects located in the territory of

respective FEZs within three years as

from the quarter of registration as

FEZ resident;

§ possibility to apply the

customs procedure of free customs

zone, which provides the right to

import goods (raw materials),

without payment of customs duties

and VAT with their further process-

ing and (or) export outside the

country-members of the Customs

Union EAEC without paying customs

duties.

A major modification for FEZ

residents is that as from 1 January,

2017 customs privileges on goods

produced by FEZ residents and sup-

plied to a customer located within

the customs territory of the Eurasian

Economic Union (Customs Union)

were cancelled. As from this date

there will be no customs privileges

for FEZ residents registered before 1

January, 2012 in the course of their

delivery of goods produced by FEZ

residents to a customer located

within the customs territory of the

Eurasian Economic Union (Customs

Union). The customs privileges have

never been applied to the residents

registered on or after 1 January, 2012.

Doing Business in Belarus 2017 28 Investment

³ Source: National Statistical Committee of the Republic of Belarus (belstat.gov.by)

Indices of capital investments in Belarusian regions

and city of Minsk in 2016³

Min

sk r

.

Go

mel

r.

Rep

ub

lic

of

Bela

rus

Mo

gil

ev r

.

Vit

eb

sk r

.

Bre

st r

.

city

of

Min

sk

94,6 93,3

Gro

dn

o r

.60

85

110

88,182,1 81,7 80,8

69,263,8

5. small and medium-sized

towns, rural areas

Main preferences:


for the sale of own-produced goods

(works, services) and other taxes and

fees (except for VAT, excise duties,

stamp and offshore duties, state fees,

patent fees, customs duties, land tax,

environmental tax, tax for the

extraction (removal) of natural

resources and other taxes calculated,

deducted and (or) transferred while

performance by tax agent his duties) -

for 7 years from the date of state

registration;


sory sale of foreign currency received

from transactions with non-residents

from the sale of own-produced goods

(works, services), as well as the lease

of property - within 7 years from the

date of state registration;


duties for the import of certain

products as a contribution to the

charter fund;

§ providing benefits not only for

commercial organizations in the

territory of medium, small towns,

rural areas, but also their separate

subdivisions.

6. special tourist and recre-

ational park "Augustow Canal"

Main preferences:


for 5 years from the date of income

declared; further - 50% of the stated

rate, but not more than 12% rate;

§ exemption from VAT for the

sale of own-produced goods (works,

services) in the territory of the

Republic of Belarus;


duties for imported technological

equipment, accessories and spare

parts, raw materials;


for buildings and structures located

in the territory of the Park, irrespec-

tive to the purpose use.

Preferential treatments depend

on the location (except for the invest-

ment agreement with the Republic of

Belarus), and also have priority devel-


opment orientations (except for

small and medium sized urban locali-

ties, rural areas regime).

3.3. Investors' rights and

obligationsThe following rights of the

investors are provided for by legisla-

tion of the Republic of Belarus:

§ the right to exercise property

and intangible rights in accordance

with legislation of the Republic of

Belarus;

§ recognition of exclusive rights

to intellectual property;

§ the right to grant land plots

for use, lease, into ownership in

accordance with the laws of the

Republic of Belarus on land use and

protection;

§ the right to create a commer-

cial organization in the territory of

the Republic of Belarus with any

amount of investments, in any legal

forms provided for by legislation of

the Republic of Belarus (restrictions:

investment is not allowed to the

property of legal entities holding

dominant position in the Belarusian

goods market without permission of

the antimonopoly body of the

Republic of Belarus, as well as

activities prohibited by the laws of

the Republic of Belarus);

§ the right to make both a

monetary contribution in the

authorized capital in foreign currency

and (or) Belarusian rubles and non-

monetary contribution, which has its

cost estimate, in accordance with the

procedure stipulated by legislation of

the Republic of Belarus;

§ the right to privileges and

preferences established in accor-

dance with the laws of the Republic

of Belarus and (or) international legal

acts binding upon the Republic of

Belarus;

§ the right to enter into an

investment agreement(-s) with the

Republic of Belarus (for more

detailed information about this right

please see cl. 3.4);

§ the right to attract foreign

citizens and stateless persons for

labour activities in the Republic of

Belarus.

In carrying out their activities in

the Republic of Belarus investors are

obliged to:

§ comply with the Constitution

of the Republic of Belarus and

legislative acts of the Republic of

Belarus adopted in accordance with

it;

§ not take actions that

constitute unfair competition as well

as actions (inaction) aimed at

prevention, elimination or restriction

of competition, causing harm to

rights, liberties, legal interests of

other persons;

§ perform other obligations

established by legislation of the


3.4. Right to conclude an

investment agreement

(investment agreements)

with the Republic of BelarusFor the purpose of creation of

additional conditions for providing

investments the investor (-s) has

(have) the right to conclude an in-

vestment agreement (-s) with the

Republic of Belarus which are gov-

erned by special legal regulations.

An investment agreement with

the Republic of Belarus is normally

concluded on the basis of a decision

of a state body or a state organization

under a special procedure as estab-

lished by legal acts of the Republic of

Belarus.

An investment agreement with

the Republic of Belarus shall define:

§ object, amount, terms and

conditions of investment activities;

§ rights and obligations of the

investor (investors) and the Republic

of Belarus;

§ liability of the parties to the

agreement for non-fulfillment of its

provisions;

§ other conditions stipulated in

accordance with legal acts of the


Investment

3.5. Guarantees of investor's

rightsThe Law on Investments guar-

antees to investors:

§ protection from uncompen-

sated nationalization and requisi-

tion;

§ unrestricted transfer of

compensation outside the territory of

the Republic of Belarus that was

received as a result of nationalization

possible only in cases of natural

disasters, accidents, epidemics,

epizootic diseases and other cases of

emergency in the interest of the

society at discretion of state bodies;

§ the right of the investor,

whose property was placed in

requisition, to judicially claim the

return of his preserved property, if the

circumstances in connection with

which the requisition was performed

are not valid anymore.

§ unconditioned transfer*

outside the territory of the Republic

of Belarus of income (profits) and

other legally obtained monetary

funds connected with investing in


Belarus as well as payments made in

favour of the foreign investor and

connected with making investments,

including:

a) monetary funds, received by

foreign investors after partial or full

termination of investing in the terri-

tory of the Republic of Belarus, in-

cluding monetary funds received by

foreign investors in the result of

investments alienation as well as

property created in the result of per-

forming investments, other objects of

civil rights;

b) monetary funds due to pay-

ment of wages to foreign citizens and

stateless persons performing labour

activities under the labour contract;

c) monetary funds due to for-

eign investors according to the judi-

cial decision.

* after payment of taxes, duties

and other obligatory payments es-


tablished by legislation of the


3.6. Guarantees and

privileges for investors that

concluded the investment 4agreement

1. Guarantee of damage com-

pensation to the investor, caused by

illegal actions (omissions) of state

bodies and authorities of executive

committees.

2. Investors have the right to:

§ provision without any

competitive proposal procedures

(auction for the right to execute

agreement for the lease of a land

plot, auction for the right to design

and construct permanent structures

(buildings, other objects) and/or

auction for transfer of land plots) of

land plots included in the list of land

plots for implementation of

investment projects, into the private

property on the basis of proprietary

rights pursuant to the legislation on

land protection and use (including

lease and (or) transfer into the private

ownership);

§ construction of the objects

provided for by the investment

project with the right to remove

objects of flora without making

compensation payments of the cost

of the removed objects of flora;

§ deduction in full of the VAT

amounts (except for tax amounts that

are not to be deducted according to

legislation) paid at acquisition

(import into the territory of the

Republic of Belarus) of all goods,

works, services, the property rights

used for designing, construction

(reconstruction), equipping of the

objects provided for by the invest-

ment project, irrespective of the VAT

amounts estimated on the basis of

goods (works, services), property

rights realization;

§ selection without carrying out

tenders of the contractor and (or)

design documentation developers,

suppliers of goods, construction

service providers, including recon-

struction of objects defined by the

investment agreements (except for

the state tenders of goods (works,

services).

3. Investors are exempt from:

§ payment for the right to

conclude a contract for the lease of a

land plot;

§ payment of the land tax or

lease payment for state owned land

plots provided for the construction of

objects specified by the investment

project for the term of designing and

construction of such objects till

December 31st of the year following

the year when the construction of the

mentioned objects was completed;

§ compensation of losses of

agriculture and/or forestry produc-

tion caused by expropriation of land

plots;

§ payments of import duties

(taking into account international

obligations of the Republic Belarus)

and VAT in case of import into the

customs territory of the Republic of

Belarus of technological facilities

and their spare parts for the objects

connected with realization of the

investment project;

§ payment of state duty for

issuing permissions for attracting

foreign labour force into the Republic

of Belarus, special permits for the

right to be involved in labour

activities in the Republic of Belarus,

and foreign citizens and stateless

individuals attracted by the investor

and (or) organization created by this

investor or with his share according

to the established procedure in the

Republic of Belarus for implementa-

tion of the investment project are

exempt from state duty for issuing

permissions for temporary residence

in the Republic of Belarus. Also the

term of making decision on issuing or

refuse to issue special permissions

cannot exceed 7 calendar days, and

the term for provision of decision on

Investment

4 Pursuit to the Edict of the President of the Republic of Belarus as of 12.11.2015 № 8 coming into effect on 15.05.2016

possibility or impossibility to attract

foreign citizen or stateless individual

is 2 calendar days;

§ VAT and profit tax, obligation

to pay which arises in connection

with gratuitous transfer of perma-

nent structures (buildings, construc-

tions), isolated premises, permanent

structures under construction and

other permanent assets transferred

for implementation of the invest-

ment project to the ownership of the

investor and (or) organization

created by this investor or with his

share according to the established

procedure in the Republic of Belarus.

3.7. Investments in a form of

public-private partnershipAs from July 2, 2016 invest-

ments within the public-private part-

nership (hereinafter – the “PPP”)

according to the Law of the Republic

of Belarus of 30.12.2015 “On Public-

Private Partnership” are possible.

The PPP usually presupposes

mutually profitable cooperation of

the governmental authorities (public

partner) and business entities (pri-

vate partner) within the stated terms

in construction (including recon-

struction) and exploitation of the

infrastructure objects on the basis of

special agreement between public

and private partners – the PPP

Agreement. The PPP is an alternative

to privatization of state-owned ob-

jects.

The PPP Law provides for that

the PPP may be exercised in respect

of infrastructure in the fields of traffic

and transport activities, public utili-

ties and public services, energy and

other spheres. The Belarusian model

of the PPP do not presuppose real-

ization of the PPP projects in render-

ing public services by private part-

ners.

Public partners within the PPP

projects are:

a) The Republic of Belarus, on

behalf of which a state body or an-

other public organization authorized

by the President of the Republic of

Belarus, the Republican state admin-

istration body authorized by the


Council of Ministers of the Republic

of Belarus or another state organiza-

tion subordinated to the Council of

Ministers of the Republic of Belarus;

b) administrative territorial unit,

on behalf of which acts the local

executive and regulatory body (exec-

utive committee).

A private PPP partner can be:

to) a legal entity (except for

state unitary enterprises, state estab-

lishments and public organizations,

as well as business entities, more

than 50 percent of the shares (stakes

in the authorized capital) of which

belongs to the Republic of Belarus or

its administrative and territorial

unit);

b) a foreign organization that is

not a legal entity;

c) an individual entrepreneur.

The PPP Law stipulates 4

stages of the PPP projects imple-

mentation:

1) preparation of proposals for

the implementation of the PPP pro-

ject;

2) taking a decision on the im-

plementation of the PPP project;

3) conduct of a tender on selec-

tion of the private partner for the

conclusion of the PPP agreement;

4) conclusion and execution of

the PPP agreement.

The PPP Law provides for the

right to submit proposals for the

implementation of the PPP projects

to public bodies and other public

organizations, as well as to potential

private partners.

It should be noted that the

National Infrastructure Plan of the

Republic of Belarus has been devel-

oped in Belarus for 2016-2030 (fur-

ther - the NIP), which identifies 100

priority infrastructure projects for the

Republic of Belarus with a total

amount of investments in these pro-

jects is more than 3 billion U.S. dol-

lars. From the list of TOP-100 pro-

jects, a number of projects is planned

to be shortlisted in the future, which

can be implemented on the PPP

principles.

Currently 7 pilot PPP projects

have been selected:

§ reconstruction of the road M-

10: the border of the Russian

Federation (Selishche) - Gomel -

Kobrin, km 109.9 - km 184.5;

§ construction of highway in the

city of Gomel 41.35 km long, taking

into account the construction of the

bridge across the river Sozh and five

overpasses;

§ construction of Beshenkovichi

hydroelectric power plant (33 MW,

130 million kWh) on the Western

Dvina river in Vitebsk region;

§ construction of a waste

processing plant in Bobruisk city;

§ reconstruction of group of

buildings of Health Institution “City

Clinical Hospital No.3 of Grodno”

under “Grodno Regional Clinical

Oncology Center”;

§ construction of kindergartens

in regions of Minsk region;

§ capital repair with the

restoration of facades and recon-

struction into a hotel complex of

facilities located in the western part

of the Kobrin Fortification of the

Brest Fortress.

Three subjects will be entitled

to take decisions on the implementa-

tion of the PPP projects after consid-

eration and evaluation of proposals

for their implementation:

1) The President of the Republic

of Belarus;

2) The Council of Ministers of


3) local Councils.

Selection of the private partner

for the conclusion of the PPP agree-

ment will be carried out, as a general

rule, on a competitive basis. In this

case, the PPP Law stipulates that the

competition will consist of two

stages - preliminary selection of par-

ticipants and choice of the partici-

pant who has won the competition.

The PPP agreement is subject

to the conclusion between the win-

ner of the competition or the only

participant of the competition,

whose bid meets the conditions of

the competition, and (or) a person

selected without conducting the

competition, and the authorized state

body or organization in the PPP field.

Investment

The subject of the agreement

on the PPP partnership is the imple-

mentation of design, construction

and (or) reconstruction, restoration,

repair, modernization and technical

maintenance, and (or) operation in

respect of the infrastructure facility.

3.8. Investments on the basis

of concessions Investment in respect to sub-

soil, water, forests, land and facilities

that are owned only by the state or

activity over which there is exclusive

right of the state may be carried out

on the basis of a concession by means

of the concession contract conclu-

sion.

In accordance with the Law on

concession, the concession contract

is a written agreement by virtue of

which one party (concessor) under-

takes to provide another party (con-

cessionary) with the right to posses-

sion and use of the concession object

or the right to perform a type of activ-

ity on a payment or gratuitous basis

for a certain time period.

Concession objects are pro-

vided into concession, as a general

rule, in four stages:

1. formation, approval, publica-

tion in print mass media and publica-

tion in global computer network

Internet of the lists of concession

objects of the Republic of Belarus and

concession objects of administrative-

territorial units, determining accord-

ing to them the type of the conces-

sion contract and the way of choosing

the concessionary;

2. determining the concession

authority, development, agreement

and approval of concessional offers;

3. organizing and conducting a

competition (auction), deciding on

the concessionary;

4. conclusion of the concession

contract.

Concession contract can be

concluded for the period up to ninety

nine years unless in respect to certain

concession objects the shortest term

is established by legislative acts.

For assignment of a concession

object for use in accordance with the


concession contract the investor

shall make a single payment to the

national (or local) budget.

The amount of the single pay-

ment, as a general rule, is determined

according to the results of the com-

petition (auction) or in the amount:

§ offered by the single partici-

pant of the competition, whose offers

correspond to the conditions of the

competition, in case the competition

is recognized as failed;

§ initial payment amount,

increased by five percent, in case the

competition is recognized failed and

there is consent of the single

participant of the auction to the

conclusion of the concession

contract with him under the

conditions offered to him;

§ established by the President

of the Republic of Belarus, in case of

the concession contract conclusion

without holding a competition

(auction);

§ established by the agreement

of the parties, but not less than the

initial amount of the single payment,

in case of a new concession contract

conclusion by the President of the

Republic of Belarus after the

expiration of the maximum validity

term of the concession contract.

3.9. Dispute resolution

between an investor and the

Republic of Belarus According to the Law on invest-

ments disputes between an investor

and the Republic of Belarus that arise

at the time of making investments

are subject to pre-court resolution by

means of negotiations unless other-

wise established by legislative acts of


Disputes between an investor

and the Republic of Belarus that

haven't been regulated according to

the pre-court procedure by means of

negotiations during three months

from the date of receipt of a written

offer on their resolution are to be

settled in a judicial proceeding ac-

cording to legislation of the Republic

of Belarus.

If disputes not relating to the

exclusive jurisdiction of courts in the

Republic of Belarus arisen between a

foreign investor and the Republic of

Belarus have not been resolved ac-

cording to the pre-court procedure by

means of negotiations during three

months from the date of receipt of a

written offer on their resolution ac-

cording to the pre-court procedure,

then such disputes regarding the

choice of the investor may be also

resolved:

§ in arbitration court estab-

lished for resolution of each specific

dispute according to the Rules of

Arbitration of the United Nations

Commission on International Trade

Law (UNCITRAL), unless parties to

the dispute agree to otherwise;

§ in the International Centre for

Settlement of Investment Disputes

(ICSID) in case this foreign investor

is a citizen or a legal entity of the

state-party to the Convention on

Settlement of Investment Disputes

between states and individuals ad

legal entities of other states of March

18, 1965.

In case the international treaty

of the Republic of Belarus and (or) the

contract concluded between an in-

vestor and the Republic of Belarus

stipulate otherwise regarding the

settlement of disputes between the

investor and the Republic of Belarus

that arise at the time of making in-

vestments, then the provisions of this

international treaty of the Republic of

Belarus and (or) the contract con-

cluded between an investor and the

Republic of Belarus shall be applied.

3.10. Investment agentInvestment agent is a person

authorized to represent interests of

the Republic of Belarus on issues of

bringing investments into the

Republic of Belarus. Creation of the

investment agent status is aimed at

improvement of work on attracting

investments into national economy

of the Republic of Belarus.

Investment


Residents of the Republic of

Belarus, both legal entities and indi-

viduals, as well as nonresidents, in-

cluding foreign citizens that are not

individual entrepreneurs may be-

come investment agents.

Authorities of the investment

agent are performed for the purpose

of development of administrative-

territorial units and branches of econ-

omy of the Republic of Belarus as

well as for realization of investment

projects.

Legal entities and citizens

claiming the receipt of authorities of

the investment agent shall submit to

the state body (in case of attracting

investments into development of the

corresponding branch) or to the exec-

utive committee (in case of attracting

investments into development of

administrative-territorial unit) the

following documents:

§ application;

§ copy of the certificate of state

registration of a legal entity

(individual entrepreneur);

§ information about the

applicant, its activities, experience in

implementation of investment

projects, proposals on representation

of interests of the Republic of Belarus

in terms of investment attraction;

§ contract for delegation of

authorities

§ copy of passport or other ID

(for non-residents – private persons

who are not self-employed individu-

als).

In case the state body or execu-

tive committee approve of the appli-

cant, the contract for representation

of interests of the Republic of Belarus

on issues of attracting investments is

concluded with the applicant.

Within the scope of representa-

tion of interests of the Republic of

Belarus, the investment agent can

perform such actions as to hold nego-

tiations with potential investors,

develop a mechanism for implemen-

tation of the investment project, draft

documents supporting agreements

with potential investors. In order to

implement these actions the invest-

ment agent may provide future inves-

tors with consulting, legal and other

services.

3.11. External guarantees of

investments in Belarus3.11.1. Multilateral Investment

Guarantee Agency

In order to create conditions

corresponding to international stan-

dards for insurance against risks of

foreign investors in the territory of

our country, attraction of foreign

financial resources without providing

guarantees of the Government of the

Republic of Belarus to foreign inves-

tors and, correspondingly, without

increase of the state external debt

amount of the Republic, the

Government took some measures

aimed at inclusion of the Republic of

Belarus into members of Multilateral

Investment Guarantee Agency (here-

inafter – MIGA).

The Republic of Belarus joined

to the Convention concerning MIGA

establishment in December 1992,

ratified the amendments to the

Convention in 2011, signed and rati-

fied an Agreement on legal protec-

tion of guaranteed foreign invest-

ments and Agreement on local cur-

rency use in 2011-2012.

MIGA is the establishment of

the Group of organizations of the

World Bank and therefore allows

investors to insure the ongoing pro-

jects against political and non-

commercial risks (restrictions of

currency transfer and exchange, ex-

propriation, war, civil disorders and

other risks).

Thus, the Republic of Belarus

has fulfilled all necessary procedures

in order to ensure its international

obligations and membership in

MIGA.

3.11.2. Agreements on assis-

tance in realization (encouragement)

and protection of investments

Guarantees of investors' rights

and protection of investments in the

Republic of Belarus are secured by a

number of international treaties.

Belarus is a party to the essential

international conventions on invest-

ment regulation.

In order to create favourable

conditions for investments made by

investors of a state in the territory of

the other state, acknowledging that

mutual assistance in realization and

protection of such investments facili-

tates development of business initia-

tive and prosperity growth of both

states, the Republic of Belarus has

signed over 60 bilateral agreements

on assistance in realization (encour-

agement) and mutual protection of

investments and over 60 bilateral

agreements on avoidance of double

taxation.

In particular, the Agreements

provide for the following guarantees:

§ National treatment (each

party treats investors of the other

party's state in a not less favourable

way than the way the party treats in

similar situations the investors of its

own state, etc.);

§ most favoured treatment

(each party treats investors of the

other party's state in a not less

favourable way than the way the

party treats in similar situations the

investors of any third state, etc.);

§ minimum standards (each

party treats investments of investors

from the other party's state according

to the international law, including

fair and equal treatment, protection

and safety, etc.);

§ expropriation and compensa-

tion (neither Party may expropriate or

nationalize investments both directly

and indirectly by means of measures

similar to expropriation or national-

ization, for other purposes than: for

the public benefit; on nondiscrimina-

tory basis; according to the appropri-

ate legal procedure; on conditions of

compensation payment, etc.).

Investment

Privatization4

35Doing Business in Belarus 2017 Privatization

Belarusian legislation is aimed

to improve legal and economic rela-

tions in the field of state property

privatization and transformation of

state-owned unitary enterprises into

joint stock companies. That is made

in order to create the conditions for

attracting investments and develop

the efficient economy.

4.1. The concept of

privatizationIn accordance with the current

legislation, privatization of state

property (hereinafter – privatization)

means selling of the enterprises as

property complexes of state unitary

enterprises, shares (stocks in autho-

rized funds) of companies which are

in the ownership of the Republic of

Belarus or in the ownership of admin-

istrative and territorial units (herein-

after – the Objects of privatization) to

the subjects of privatization on the

terms and conditions provided by

legislation.

Subjects of privatization are:

individuals, including individual

entrepreneurs, foreign citizens and

stateless persons, legal entities of

the Republic of Belarus, except state

organizations and business entities

in the authorized funds of which

more than 50 percent of shares

(stocks) are in the ownership of the

Republic of Belarus and (or) in the

ownership of administrative and

territorial units, foreign states and

their administrative and territorial

units, international organizations,

foreign legal entities as well as for-

eign organizations that are not legal

entities.

Privatization can be imple-

mented through the sale of:

§ shares (stocks in authorized

funds) at an auction;

§ shares (stocks in authorized

funds) by a competitive bidding;

§ enterprises as property com-

plexes at an auction;

§ enterprises as property com-

plexes by a competitive bidding;

§ shares of an open joint-stock

company according to the results of

trust management.

Sale of a privatization object

without holding an auction (competi-

tive bidding) is carried out in the

event of the sale of shares of an open

joint-stock company according to the

results of trust management and in

other cases established by the

President of the Republic of Belarus.

4.2. The procedure of

privatizationPrivatization is carried out on

the basis of privatization body's deci-

sion.

After decision the privatization

body makes the publication about

holding an auction (competitive

bidding) for the sale of an object of

privatization and publishes informa-

tion about the auction (competitive

bidding) for the sale of an object of

privatization in the worldwide com-

puter network Internet.

The obligation to organize and

hold auctions (competitive biddings)

is under privatization body, which

installs auction rules (advance

amount, terms and other conditions),

accepts applications for participation

in the auction (competitive bidding),

creates a commission on conducting

the auction (competitive bidding) on

the sale of the objects of privatiza-

tion. The participant, that is consid-

ered a winner of the auction (compet-

itive bidding) is appointed by the

commission for holding the auction

(competitive bidding), which is exe-

cuted by means of the corresponding

protocol.

Sale of the privatization objects

is carried out only for monetary funds

at the open auctions (competitive

biddings) the participants of which

can be all subjects of privatization.

4.2.1. Special aspects of selling

shares (stocks in authorized funds)

and enterprises as property

complexes at auction

Sale of shares (stakes in autho-

rized funds) and enterprises as prop-

erty complexes at the auction is car-

ried out when the buyer is not re-

quired to fulfill any conditions.

Sale at auction of shares of

closed joint stock companies and

stakes in authorized funds of other

business entities shall be carried out

according to the established rule of

offering such shares, stocks in the

authorized funds for purchase to

other participants, those business

entities, third persons in accordance

with legislation.

The initial sale price of an enter-

prise as a property complex with a

number of employees under 100

persons, the outstanding financial

liabilities of which on the date of

determining the estimated cost of

the enterprise as a property complex

are equal to the balance cost of as-

sets or exceed this cost, when sold

through a competitive bidding the

estimated cost is one base unit on the

date of holding the competitive bid-

ding, established in accordance with

legislative acts.

The winner of the auction is

deemed to be the participant who

offered during the auction the high-

est price for the object of privatiza-

tion.

The participant, who has won

the auction, and the contest commis-

sion shall sign protocol on the results

of the auction on the day of the auc-

tion.

The enterprise as a property

complex is transferred to the cus-

tomer after state registration of the

sale and purchase contract under the

transfer act. State registration of the

transfer of the ownership right to the

enterprise as a property complex is

carried out after full payment for the

object of the privatization by the

buyer in accordance with the sale and

purchase contract. The ownership

right to the enterprise as a property

complex is transferred to the buyer

from the moment of state registra-

tion of the ownership right transfer.

Buyers should know that the

punishment for the breach of the

payment term is tough: fine in the

amount of 10 percent from the pur-

chase price of the privatization ob-

ject and a penalty interest in the

amount of 1/360 of the refinancing

rate of the National Bank of the

Republic of Belarus, established on

date of transferring the funds (mak-

ing payments), on the unpaid sum for

each day of delay.

4.2.2. Special aspects of selling

shares (stocks in authorized funds)

and enterprises as property

complexes on the basis of

competitive bidding

Sale of shares (stocks in autho-

rized funds) is carried out on the basis

of competitive bidding, when the

purchaser is required to fulfill certain

conditions set forth in the decision

on privatization.

Sale on the basis of competitive

bidding of shares of closed joint stock

companies and stakes in authorized

funds of other business entities shall

be carried out according to the estab-

lished rule of offering such shares,

stocks in the authorized funds for

purchase to other participants, those

economic companies, third persons

in accordance with legislation.

The following conditions can be

stated in the decision on privatiza-

tion through sales of shares (stocks in

authorized funds) on the basis of

competitive bidding:

§ amount, time constraints and

spheres of investments;

§ preservation and (or) creation

of a certain number of jobs within a

certain period;

§ preservation of the sphere of

business activity of the business

entity within a certain period;

§ preservation and funding for a

certain period of social facilities that

the economic company have in the

ownership or under a contract of

gratuitous use;

§ other conditions.

The following conditions can be

stated in the decision on privatiza-

tion through the sale of enterprises

as property complexes on the basis of

competitive bidding:

§ amount, time constraints and

spheres of investments;

§ preservation and (or) creation

of a certain number of jobs within a

certain period;

§ retraining and (or) advanced

training of employees;

§ preservation within a certain

period of the range of manufactured

products (types of works, services);

§ preservation within a certain

time of the sphere of business activ-

ity of the state unitary enterprise;

§ other conditions.

In the event of sale of an enter-

prise as a property complex on the

basis of competitive bidding with the

establishment of initial sale price

equal to one base unit, the owner of

the privatized enterprise as a prop-

erty complex is required to repay the

indebtedness on financial obliga-

tions of the state unitary enterprise,

the property complex of which he has

acquired, to keep a certain amount of

jobs, to ensure operational and com-

mercial activities of the enterprise

and meet other conditions of the sale

and purchase contract.

The winner of the competitive

bidding is deemed to be the partici-

pant whose all offers regarding the

conclusion of the commission on

conducting the competitive bidding

on the sale of privatization objects,

correspond to the terms of the com-

petitive bidding or contain better

terms in comparison with the terms

of the competitive bidding.


the competitive bidding, and the

contest commission shall sign proto-

col on the day of the competitive

bidding.

4.2.3. Selling shares of open

joint stock company according to the

results of trust management

Sale of part of shares (not more

than 10 percent of the authorized

fund) owned by the Republic of

Belarus or an administrative and

territorial unit of open joint-stock

companies, the debt on financial

obligations of which within two years

preceding the date of the decision on

privatization mainly (at least 14

months) is equal to book value of

assets or exceeds its assets for two

years preceding the date of taking

the decision on privatization, can be

carried out according to the results of

trust management of shares of un-

profitable open joint-stock compa-

nies.

Shares of unprofitable open

joint-stock companies owned by the

Republic of Belarus or an administra-

tive and territorial unit may be trans-

ferred into trust management with

the right to buy out those shares

according to the results of trust man-

agement to the subjects of privatiza-

tion – professional securities market

participants (banks, other financial

organizations).

Privatization body accepts ap-

plications for participation in com-

petitive bidding and establishes a

contest commission to conduct the

competitive bidding. The contest

commission determines the partici-

pant, who wins the competitive bid-

ding, and draws up minutes on the

results of the competitive bidding.

The competitive bidding is

considered invalid if:

§ application form for participa-

tion in the competitive bidding is

filed only by one participant;

§ no applications for participa-

tion in the competitive bidding were

filed;

§ only one participant or none

of the participants appeared at the

competitive bidding.

A competitive bidding is consid-

ered to have no result if among the

applications filed by the participants

of the competitive bidding under the

terms of the competitive bidding

none of the proposals of the partici-

pants of the competitive bidding

corresponds to those terms.

The winner of the competitive

bidding is deemed to be the partici-

pant, whose all offers, according to

the conclusion of the commission on

conducting the competitive bidding,

correspond to the terms of the com-

petitive bidding or contain better

terms in comparison with the terms

of the competitive bidding.


the competitive bidding, and the

contest commission shall sign proto-

col on the results of the competitive

bidding on the day of the competitive

bidding.

The procedure for conducting

the competitive bidding on the trans-

Doing Business in Belarus 2017 36 Privatization

fer of the shares of unprofitable open

joint-stock companies into the trust

management with the right to buy

out a part of those shares according

to the results of the trust manage-

ment and for concluding the contract

on trust management of shares with

the right to buy out a part of those

shares according to the results of the

trust management (hereinafter –

contract of trust management with

the right to buy out) as well as for

control over its fulfillment is deter-

mined by the Council of Ministers of

the Republic of Belarus with regard

to the requirements of legislative

acts.

The subject of the privatization

that concluded a contract of trust


out, after the termination of the trust

management and in case he fulfilled

all conditions of the contract of trust


out, has a right to purchase a part of

the shares transferred to him into

trust management, in the ownership

under a sale and purchase contract

under conditions specified in the

contract of trust management of

shares with the right to buy out. Sale

price of shares of unprofitable open

joint-stock companies is determined

by their nominal value in accordance

with the charters of those companies

on the date of the conclusion of the


right to buy out.

In the case of breach of the


right to buy out, the subject of privat-

ization has no right to repurchase the

shares of unprofitable open joint-

stock company and bears the liability

provided by the contract of trust


out.

4.3. Transformation of the

state unitary enterprises into

the open joint stock

companies Decisions on the transforma-

tion of the state unitary enterprises

into the open joint stock companies

are made by different state bodies,


depending on the amount of employ-

ees, working in this enterprise and

direct property owner:

§ concerning the republican

unitary enterprises employing 1,000

people or more by The Property State

Committee of the Republic of

Belarus;

§ concerning the republican

unitary enterprises employing less

than 1,000 people – by The National

cadastral Agency and its subordinate

organizations;

§ concerning municipal unitary

enterprises – by the appropriate local

executive and administrative author-

ities.

The founders of the open joint

stock companies created in the pro-

cess of transformation of state uni-

tary enterprises are the privatization

bodies. Other subjects of privatiza-

tion who have made monetary and/or

non-monetary contributions to the

authorized funds of the open joint-

stock companies can be additional

participants.

The choice of other founders

other than the state is made by the

privatization body by holding a com-

petitive bidding, and in case the com-

petitive bidding is recognized as

failed – by the direct negotiations of

the privatization body with the single

participant of the competition.

Works on transformation of the

state unitary enterprise into open

joint-stock company are performed

by the commission for transforma-

tion. The commission for transforma-

tion includes representatives of the

collective of employees of the state

unitary enterprise and a representa-

tive of the state body, state organiza-

tion, local administrative and execu-

tive body to which the state unitary

enterprise being transformed is sub-

ordinated (makes part of).

The amount of the authorized

fund of the open joint-stock company

is determined based on the balance

sheet value of assets and liabilities of

the state unitary enterprise or several

state unitary enterprises as on the 1st

of January of the year in which the

transformation is conducted, under

the procedure established by the

republican body of state administra-

tion for managing state property, and

in the event of participation of the

founder other than the state, also

based on the value of the contribu-

tion of such founder, determined in

accordance with acts of legislation,

and may not be less than the mini-

mum size established by legislative

acts.

The sectorial commission nego-

tiates the project of the transforma-

tion of the state unitary enterprise

into the open joint stock company,

prepares the conclusion on the possi-

bility of establishing the open joint

stock company.

Based on the conclusion of the

sectorial commission, the privatiza-

tion body makes a decision on the

establishment of an open joint stock

company in the course of transforma-

tion of the state unitary enterprise, or

in the course of transformation of a

few state unitary enterprises.

Privatization

Constructionand Real Estate5

39Doing Business in Belarus 2017 Construction and Real Estate

5.1. Real estateA general notion of real estate is

given by Civil Code of the Republic of

Belarus, according to which real es-

tate (real property) include land

plots, subsoil plots, surface water

objects, and all that is firmly con-

nected with the land, including for-

ests, perennials, capital structures

(buildings), incomplete capital struc-

tures conserved, premises, parking

places. Some things are equated to

real estate, for example enterprises

as property complexes, aircraft and

sea vessels, inland navigation vessels

sailing the "river-sea" space objects

which are subject to state registra-

tion. Furthermore, other objects can

be classified as real estate according

to the laws of the Republic of Belarus.

The main feature of real estate is the

fact of impossibility to move such

objects without incommensurate

damage to their purpose.

5.2. State registration

of real estate, rights and

deals with itReal estate, rights and deals

with it are subject to state registra-

tion in cases provided for by the leg-

islative acts.

State registration is a legal act

of state admission and confirmation

of a fact connected with creation,

changing, disappearance of real es-

tate, rights to it and encumbrances on

it, as well as transactions with it.

There is a Common state regis-

ter of real estate, rights to it and deals

with it which contains information

and documents regarding registered

objects of real estate in the Republic

of Belarus.

State registration is necessary

in cases of:

§ creation, changing, disappear-

ance of real estate;

§ occurrence, changing, termi-

nation of rights to real estate includ-

ing parts in rights, except for parts in

right of common ownership of com-

mon household and limitations (en-

cumbrances) on rights over real es-

tate according to the above-

mentioned law and other legislative

acts;

§ transaction with real estate

which is subject to state registration

according to legislative acts of the


State registration is carried out

in relation to the following types of

real estate:

§ land plots – a part of the land

surface having their boarder and

purpose and firmly connected with

constructions (buildings, structures)

located on it;

§ constructions (buildings,

structures) - any objects built on or

under land intended for long-term

use, the creation of which is recog-

nized as completed in accordance

with laws of the Republic of Belarus

and the purpose, location, dimen-

sions of which are described in the

documents of the Common state

register of real estate;

§ incomplete conservated con-

structions – a conservated construc-

tion object, creation of which as con-

struction is permitted in accordance

with legislation of the Republic of

Belarus, but not accomplished;

§ isolated premises (including

residential) - the inner space of a

construction (building, structure)

separated from other related parts of

the construction by overlaps, walls,

division walls, having an independ-

ent entrance from auxiliary premise

(entrance hall, corridor, walkway,

stairway, pace, elevator hall etc.) or

from public area (area around the

house, street etc.) directly or from

other premises or territory by using

servitude, the purpose, location in the

construction, the area of which is

described in the documents of the

Common state register of real estate;

§ parking places – stalls in-

tended for placing a vehicle, which

are a part of a construction belonging

to a legal entity or an individual and

registered as an object of real estate;

§ enterprises as a property com-

plexes used in the entrepreneurial

activity. The enterprise includes all

types of property intended for its

activity, including land plots, build-

ings, structures, equipment, inven-

tory, raw material, production, claims,

debts, as well as trade name, trade-

mark, service mark and other exclu-

sive rights.

The legal significance of the

state registration is that only since

the moment it has taken place:

џ real estate is considered to be

created, changed, eliminated;

џ right, limitation (encumbrance)

of a right to real estate arises,

can be transferred and termi-

nated;

џ transaction is recognized as

concluded.

As a general rule according to

the Civil Code transactions with real

estate are subject to state registra-

tion. Non-observance of the obliga-

tion to provide state registration of a

transaction leads to its nullity. So no

rights and obligations arise from

such deal and the parties have to

return all received in such a transac-

tion.

There are exceptions from this

rule provided by the legislation of the

Republic of Belarus: lease and sub-

lease contracts, the contracts of un-

compensated use of real estate (con-

struction (building, structure), iso-

lated premises, parking place) re-

gardless of the term of lease, sub-

lease, uncompensated use as well as

agreements intended to change or

terminate the above-mentioned

contracts; rights to real estate arising

from the above-mentioned contracts

are not subject to state registration.

These contracts are considered

as concluded from the date of its

signing by the parties.

The state registration is imple-

mented by territorial organizations

on the registration of real estate

subordinated to the Property State

Committee of the Republic of Belarus

(The National cadastral Agency, dis-

trict and Minsk city agencies of state

registration and land cadastre and

their subordinate branches and orga-

nizations). The terms of administra-

tive procedures connected with state

registration, as well as fees for state

registration are established by legis-

lation. The general term of state reg-

istration is 5 working days from the

date of the documents submission.

Moreover, there is a possibility to

perform registration actions expedi-

tiously – within 2 working days or as a

matter of urgency – within 1 working

day (in this case an additional pay-

ment is to be made).

5.3. Land plotsLand plot is one of types of real

estate which are subject to state

registration as a general rule.

The legislation provides for two

ways of providing land plots: based

on the auction results and without

conducting an auction. As a general

rule, provision of land plots, regard-

less of their intended purpose, is

performed according to the results of

the auction.

In the Republic of Belarus legal

entities are provided with land plots

according to the results of the auc-

tion:

§ for the right to conclude land

rental agreements;

§ with conditions for the right to

design and construct capital struc-

tures (buildings, constructions);

§ for the sale of land lots into

private ownership (according to the

results of this auction land plots may

be provided into private ownership

only to non-state legal entities of the

Republic of Belarus).

In practice, most often legal


according to the results of the auc-

tion for the right to conclude land

rental agreements.

In specific cases land plots may

be provided without holding an auc-

tion, based on the decision of the

local executive committee on the

seizure and provision of a land plot.

According to legislation of the

Republic of Belarus organizations

can own land plots on the basis of the

following rights: ownership, perma-

nent or temporary use, lease.

The type of the right on the

basis of which a land plot will be

provided to a legal entity is deter-

mined in the decision of the local

executive committee on the seizure

and provision of a land plot and de-

pends on:

§ the way of the land plot provi-

sion (if the provision of the requested

land plot is provided for only on the

results of the auction (the local exec-

utive committee announced a corre-

sponding auction, or a land plot is

included on the relevant lists, or the

decision on the formation of a land

plot for the auction is taken), such

land plot can be provided for rent or

into private property, depending on

the type of the auction);

§ a subject who applies for the

provision of a land plot (foreign legal


only on the basis of the rental right);

§ a kind of object planned to be

constructed on a land plot.

One of the main principles in

land laws is a principle of purpose

use. Non-compliance with this rule

may result in increased ratios of pay-

ments for the land or forced termina-

tion of right for the land plot (includ-

ing ownership).

The use of land plots is paid in

the Republic of Belarus. The forms of

payment for a land plot are land tax

or rent.

For the use of a privately owned

land plot, permanently or temporally

used, land tax is to be paid according

to the legislation.

Rent is to be paid for the use of

land plots granted on lease.

The procedure of collection of

rental charge for the use of land

plots, owned by the state is estab-

lished by the President of the


5.3.1. Ownership of the land

plots

Land plots can be in private

ownership of non-state legal entities

of the Republic of Belarus, foreign

states, international organizations.

Land plots owned by the state

can be transferred to private owner-

ship as a result of the auction and

without auction. The legal grounds

and the procedure for allocation of

land plots owned by the state are

established by the President of the


The disposal of land plots pri-

vately owned is implemented on the

basis of civil law transactions.

5.3.2. Permanent use

Permanent use is one of the

forms of a land plot use without pre-

determined term which terminates in

cases provided for by legislation.

Commercial private organiza-

tions can use under permanent use

title land plots which had been trans-

ferred to them before the Land Code

entered into force, or if the title to

permanent use of a land plot was

transferred to them from other orga-

nizations, as well as if a land plot was

transferred:

§ for maintenance of objects of

real estate owned by the state;

§ for construction of apartment

dwelling buildings (except dwelling

buildings of higher comfort accord-

ing to the criteria stipulated by legis-

lative acts); maintenance of apart-

ment dwelling buildings; construc-

tion and (or) maintenance of garages

and parking lots;

§ for reconstruction of existing

objects when the change of the tar-

get destination and (or) the size of

the land granted to a legal entity on

the basis of the right of permanent

use;

§ for construction and (or) main-

tenance of transport and engineering

infrastructure and roadside service.

5.3.3. The right for temporary

use of land plots

Temporary use is one of the

forms of a land plot use for a limited

period of time stipulated by the Land

Code of the Republic of Belarus.

The term of use depends on the

purpose for which land was granted.

Usually this term doesn't exceed 10

years.

Commercial legal entities may

have on the right of temporary use

land plots allocated to them prior to

the entry into force of the Code of the

Republic of Belarus on the ground,

land plots the right of temporary use

to which transferred to them from

other legal entities of the Republic of

Belarus according to the established

procedure, as well as land plots pro-

Doing Business in Belarus 2017 40 Construction and Real Estate

vided:

§ for the extraction of common

minerals, including peat, construc-

tion of facilities needed for their

processing and storage, as well as for

the use of geothermal resources,

mineral resources and drying of

lignin for the production of strategic

minerals, minerals limited distribu-

tion in the presence of the mining

lease, construction of needed for

their processing and storage;

§ to concessionaires on the

basis of concession contracts. In this

case, the land may be granted for

temporary use for up to 99 years.

In addition, land plots may be

granted to legal entities for tempo-

rary use for the same purposes as the

ones established for permanent use,

for the term up to 10 years.

5.3.4. Lease

Land plots can be granted on

lease to legal entities of the Republic

of Belarus, as well as to foreign orga-

nizations, their representative offices,

foreign states, diplomatic missions

and consular posts of foreign states,

international organizations and their

representative offices.

The lease of privately owned

land plots is carried out on the basis

of a civil law transaction.

Land plots owned by the state

can be granted on lease at an auction

as a general rule. But there is a list of

cases stipulated by legislation in

which land plots can be granted on

lease without an auction. For exam-

ple land plots can be granted on

lease without an auction to an inves-

tor for realization of projects pro-

vided by investment agreement with

the Republic of Belarus, to organiza-

tions for objects construction of engi-

neering and transport infrastructure,

construction of roadside service

objects, to residents of free eco-

nomic zones, special tourist and rec-

reational parks - for construction and

maintenance of real estate in these

areas, parks, to organizations and

entrepreneurs engaged in collection,

sorting (unbundling), preparation for

disposal, and (or) use of secondary

material resources to accommodate


the reception centers of secondary

raw materials, sorting facilities, dis-

posal, recycling of municipal waste

disposal facilities and municipal

solid waste.

Time-terms and other condi-

tions of a land plot lease are deter-

mined by the lease contract. But the

time-term of lease of a land plot

owned by the state and allocated for

construction and (or) maintenance of

capital buildings should be not less

than the time-term of the construc-

tion works and (or) operation of these

capital buildings. In any case the

time-term of the land plot lease

should not exceed 99 years.

The construction of permanent

structures (buildings, constructions)

on the leased state-owned land plots

is allowed only if it corresponds to

the intended purpose of these land

plots and the conditions of rent spec-

ified in the decisions of state authori-

ties that are responsible for state

regulation and management in the

sphere of land use and protection,

and in land lease contracts.

5.4. Construction5.4.1. Regulation of activities in

the construction sphere

Under the law there are 5

classes of complexity for construc-

tion objects depending on the tech-

nical characteristics and functional-

ity of buildings and structures. This

classification is used for the purpose

of state examinations, procedures for

conformity assessment and certifica-

tion.

In this case, certain activities in

the field of construction (design,

engineering surveys, the functions of

the customer, general designer, gen-

eral contractor, providing engineer-

ing services), as well as the perfor-

mance of several types of works dur-

ing construction of the first - fourth

classes of complexity can be per-

formed only on the basis of certifi-

cates of conformity for the right to

perform this type of work possessed

by organizations and individual en-

trepreneurs.

Currently, organizations and

individual entrepreneurs operating

in the field of construction are re-

quired to undergo mandatory certifi-

cation for activities in the field of

construction.

One of the obligatory condi-

tions for the organization to get a

certificate of conformity is the pres-

ence of the employed professionals

with qualification certificates for the

right to carry out activities in the field

of construction. The criteria for com-

pliance to get the qualifying certifi-

cate are specialists' education in the

specialty in the field of construction,

as well as work experience in the

relevant specialty.

RUE “BELSTROYTSENTR” is

the organization authorized to carry

out certification of organizations

(individual entrepreneurs) as well as

specialists and to issue certificates of

conformity and qualifying certificates

accordingly.

When issuing certificates of

conformity it is checked whether the

applicant-organization is in compli-

ance with the criteria established by

the legislation aimed at assessment

of the necessary qualification of the

applicant's employees, resources

needed to perform the works, as well

as the quality control system of the

works performed.

If controlling authorities find

out that the holder of the certificate

doesn't comply with the qualifying

criteria established by the legislation,

it is the basis for the termination of

the validity of the certificate of con-

formity. In addition, since 06.02.2016

additional grounds for termination of

the certificate of conformity have

been introduced in the following

cases:

§ repeated, within the calendar

year, issue of the negative conclusion

of state expertise in architectural and

construction projects, to the con-

struction phase, starting complexes

and estimates (estimate documenta-

tion), developed by the holder of the

certificate of compliance, who vio-

lated when developing them the

requirements of technical normative

legal acts in the field of architecture,

Construction and Real Estate

urban planning and construction

activities;


0,8 0,4 0,9 0,8 0,8 0,9 1,8 1,7 1,5 2,0 2,8

Volumes of contractor's works by forms of ownership¹

68,8 69,9 69,8 71,3 73,7 76,2 79,7 81,5 82,2 83,0 83,1

30,4 29,7 29,3 27,9 25,5 22,9 18,5 16,8 16,3 15,0 14,1

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Government Private Foreign


Construction and Real Estate

Doing Business in Belarus 2017 43 Construction and Real Estate

Pharmaceuticalactivities6

45Doing Business in Belarus 2017Pharmaceutical

activities

Pharmaceutical activities relate

to spheres that are sufficiently regu-

lated by legislation of the Republic of

Belarus. There are the following com-

ponents of the pharmaceutical activi-

ties:

§ industrial production of

medicines;

§ wholesale trade of medicines;

§ pharmacy manufacture of

medicines;

§ retail trade of medicines.

In addition to these compo-

nents the issues of storage, transpor-

tation, medical use, disposal, adver-

tising of medicines, pricing of medi-

cines are also regulated.

6.1. Licensing of

pharmaceutical activitiesLicensing authority is the

Ministry of Health.

License is effective from the

date when the licensing authorities

make the decision on license grant-

ing with no expiry date. In case the

name, location of the licensee's place

of activity and (or) the types of works

(services), as well as other informa-

tion specified in the license are

changed, it's necessary to make

changes in the license.

Licensing requirements and

conditions apply to the following

criteria:

§ education, skills and experi-

ence of the manager and personnel;

§ availability of premises,

equipment and vehicles that are

needed for activities and that meet

their business requirements, which is

supported by technical documenta-

tion and by the opinion of a state

body;

§ nomenclature of medicines

claimed for production that is

coordinated by the state authorities.

Since 2015 all organizations,

whose main activity is the pharma-

ceutical one, has become public

health organizations. Consequently

there are additional qualification

requirements for managers of such

organizations.

6.2. Registration of medicinesLegislation of the Republic of

Belarus prohibits the import, sale and

medical use of medicines that are not

registered in Belarus. The registering

authority is Republic Unitary

Enterprise “Center for Examinations

and Tests in Health Service” under the

Ministry of Health. The registration

procedure includes several stages:

1. passing the set of engineer-

ing preliminaries (expertise, audits,

tests and other examinations). The

set of engineering preliminaries is

defined in each specific case;

2. preparation and submission

of the registration dossier, which

includes the established documents.

There are certain requirements to the

content and execution of the docu-

ments established by the Ministry of

Health. Applicant is required to es-

tablish the ultimate selling price of

the medicinal products which should

be compared with selling prices in

the country of origin of a medicinal

product, states - members of the

Eurasian Economic Union, in other

neighboring countries while apply-

ing for state registration. In the future

distribution of the medicinal prod-

ucts is permitted only within the

declared prices;

3. the decision making by the

Ministry of Health on state registra-

tion (denial of state registration) of

medicinal products;

4. after the decision making by

the Ministry of Health on the state

registration of medicinal products,

the entry of information about them

on the State Register, execution and

issuance of the registration certifi-

cate.

6.3. Pricing in medicinesLegislation of the Republic of

Belarus establishes the limits of

wholesale and trade (used in the

retail trade) markups that must be

met by distributors and retailers. The

amount of the markup depends on

the base cost (price of the Belarusian

manufacturer or price of the im-

ported goods with due account of

customs duties, taxes and transporta-

tion costs), and this increases the

base cost. Wholesale markups are

installed within 2 - 11%, trade mark-

ups - 2 - 30%.

6.4. Advertising of medicinesIn addition to the general re-

quirements for advertising of any

goods there are certain restrictions

and prohibitions on advertising of

medicines.

So, as a rule, advertising of medi-

cines is allowed only if the advertiser

has the approval issued by the

Ministry of Health of the Republic of

Belarus.

Placement (distribution) of

advertising of medicines, which are

dispensed on prescription, is allowed

only in specialized print media, as

well as in places of medical or phar-

maceutical exhibitions, seminars,

conferences and other similar events.

Advertising of medicines that

are not registered in the Republic of

Belarus is prohibited.

There are also certain require-

ments to the content of advertising

materials.

It should be noted that legisla-

tion also sufficiently regulates other

issues related to the handling of

medicines: storage, transportation,

disposal and etc. It's noteworthy that

there are certain measures on protec-

tion of the Belarusian (Russian) medi-

cine manufacturers. This protection is

carried out by establishing a list of

Belarusian-made (Russian-made)

medicines mandatory to be available

in pharmacies of all forms of owner-

ship.

Finance andBanking System7

47Doing Business in Belarus 2017 Finance and Banking System

7.1. Payments and financial

statementsAs a general rule, payments

between legal entities and individual

entrepreneurs in Belarus are carried

out on a cashless basis. Nevertheless,

some transactions between legal

entities, their separate subdivisions

and individual entrepreneurs (here-

inafter – business entities) are per-

mitted in cash.

Cash transactions are carried

out for the obligations arising from

civil-law relations including by de-

positing money directly to banks and

charging these payments to the cur-

rent bank accounts of recipients. The

total amount of cash settlements

cannot exceed 100 base units (as for

the date of 01.01.2017 the possible

amount of cash payments is about

1130 Euro) during one day.

Except for bank cash registers,

the receipt of cash from business

entities in the amount of not more

than 100 base units is carried out by:

§ business entities engaged in

the exhibition activities – for the

services rendered by them, rental of

premises;

§ business entities performing

wholesale trade in shops, selling

goods with the use of self-service

with a minimum trade mark-up,

including by cash, and business

entities engaged in the retail trade –

for the goods purchased from them;

§ administrations of the

markets, – for their services in

accordance with rules of creation and

operation of markets for the lease of

retail space, rental of premises;

§ business entities selling fuel

and providing services directly

related to international road

transport – for fuel and services

(transport washing, minor forced

repair of transport, documents

execution for carriage of dangerous

goods, which requires special

permission, parking lots, telephone

and fax, terminal services (connec-

tion with border control of transport

and cargo), escorting of cargo (in

exceptional cases).

Cash payments to the budget

and state non-budget funds are made

without size limits.

Some legal entities and individ-

ual entrepreneurs are not allowed to

make cash transactions. They are:

§ legal entities and individual

entrepreneurs engaged in wholesale

trade of alcoholic, inedible alcohol-

containing products, inedible ethyl

alcohol, tobacco raw material,

tobacco products;

§ legal entities in state of

liquidation, as well as individual

entrepreneurs in regard to which

there is a decision on termination of

their activities, legal entities and

individual entrepreneurs in regard to

which bankruptcy proceedings have

been started.

The sources of cash for making

payments are:

§ cash received from the current

bank accounts, clients' accounts, to

which corporate (private) debit cards

are issued;

§ cash received into the cash of

legal entities and individual

entrepreneurs;

§ personal money of the

employees of legal entities that are

used for the benefit of legal entities,

their separate divisions, individual

entrepreneurs.

Cash transactions between

business entities and private individ-

uals while selling goods, performing

works and/or rendering services are

allowed in the amount of not more

than 1000 basic units.

7.1.1. The procedure of using

cash

Legal entities, their divisions

and individual entrepreneurs, who

have opened current (corporate)

bank accounts (hereinafter – busi-

ness entities) cash money in servic-

ing banks and/or its departments,

other banks to collecting agents or to

the organizations of the Ministry of

Communications and

Informatization of the Republic of

Belarus.

Business entities shall inde-

pendently in written form determine

the procedure and the terms for de-

positing cash to the servicing bank or

to the collection service, except for

those business entities which receive

cash in the servicing bank or have

other erratic ways of cash receipt (not

more than 5 days in the preceding

calendar month). Such business enti-

ties do not determine the procedure

and the terms for cash depositing.

Business entities which have

opened the current bank accounts

spend the cash received to the cash

desk for current operations (includ-

ing the settlement of payments to

the budget, state non-budgetary

funds) in the amounts established by

the legislation for the implementa-

tion of future expenses (if there are

such amounts) and contracts.

Cash can also be received by

business entities in serving banks for

the purposes, established by law, and

are spent for the purposes specified

servicing bank as received.

7.1.2. Financial statements

Annual financial accounting

reports of business entities are the

primary source of information about

the results of their economic activi-

ties and their financial state. It allows

to find out about the income and

expenditures incurred by organiza-

tions, to contribute to the prevention

of negative results of the economic

activities of the organization and

reveal reserves of its financial stabil-

ity.

These reports are of interest not

only to these business entities and

their parent organizations, but also to

external users: controlling state

bodies, banks, credit organizations,

counterparties and etc., because

these indicators provide information

about the presence and movement of

assets and liabilities, as well as about

the use of material, labour and finan-

cial resources in accordance with the

approved standards.

The Ministry of Finance of the

Republic of Belarus is the govern-

mental body that provides method

guidance of accounting reports and

determines composition of annual

financial accounting reporting,

according to which procedure it

should be compiled and in what way

it should be presented to the inter-

ested persons.

An organization prepares the

accounting reports for the period of

month, quarter and year. In this case,

monthly and quarterly financial

accounting reports are the interme-

diate reports.

Nowadays, financial accounting

reports of Belarusian legal entities

for a quarter and year include the

following documents (standard

forms):

1. balance sheet;

2. profit and loss report;

3. statement of capital changes;

4. statement of cash flow;

5. statement on the use of

targeted financing.

Financial accounting reports of

organizations for the month consist

of the balance sheet.

Organization's financial ac-

counting reports is composed with

due consideration of activities indi-

cators of its branches, representative

offices and other separate units,

including those with separate bal-

ance.

Organizations must submit the

annual accounting not later than on

31st of March of the year following

the reporting year.

Mandatory publication of an-

nual accounting reports is provided

by the laws of Belarus for the follow-

ing subjects:

џ open joint-stock companies;

џ banks, banks holding companies;

џ insurance companies;

џ insurance brokers.

Other organizations can publish

their annual accounts at will.

For violation of the procedure

for maintaining financial accounting

reports there is an administrative

liability in the form of warning or fine

ranging from 4 to 20 base units .

Currently the first steps towards

the international financial reporting

standards (hereinafter IFRS) have

already been taken in the Republic of

Belarus. As from 1 January, 2017, 42

IFRS standards and 26 explanations

thereto, as adopted by the

International Financial Reporting

Standards Fund, have been put into

effect in the Republic of Belarus. The

mentioned IFRSs will act as techni-

cal regulatory legal acts and will be

mandatory for application with re-

gard to public interest entities, banks,

and non-banking credit financial

organizations in preparation of their

reporting.

Annual accounting of public

interest entities prepared pursuant to

IFRSs along with audit reports on

this accounting shall be:

§ submitted to the Ministry of

Finance (in case of the bank – to the

National Bank) not later than on June

30 of the year following the account-

ing year;

§ placed on the public interest

entity's Internet web-site not later

than on July 31 of the year following

the accounting year – submitted to

the Ministry of Finance (in case of the

bank – the National Bank) not later

than on June 30 of the year following

the accounting year;

§ placed on the web-site of the

public interest entities in the Internet

not later than on July 31 of the year

following the accounting year.

Some business entities are

entitled not to maintain bookkeeping

and accounting but to keep records in

a special book (ledger) for recording

income and expenses instead. Such

entities include organizations with a

number of employees of at most 15

(average for the period from the be-

ginning of the year till the reporting

period) and individual entrepreneurs

whose amount of gross revenue from

the beginning of the year does not

cumulatively exceed 410,000

Belarusian rubles, provided they

apply the simplified taxation system.

7.2. PricingThe main legal act that regu-

lates relations in the field of pricing

in the Republic of Belarus is the law

of the Republic of Belarus as of May

10, 1999 No. 255-З “On pricing”.

As a general rule, in Belarus

there are free prices (tariffs) used in

respect of goods (works, services).

The exception to this rule is

regulation of prices (tariffs) in respect

to:

§ goods produced (realized) in

conditions of natural monopolies,

Doing Business in Belarus 2017 48 Finance and Banking System


190,0

170,0

150,0

130,0

110,0

90,0

70,0

50,02005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Resources industry

Manufacturing industry

Production and distribution of electricity, gas and water

Industry – others

Industrial producer price indexes in 2005-2015¹

services rendered (provided) by the

subjects of natural monopolies

relating to the field of natural

monopolies;

§ certain goods (works,

services), a specific list of which is

established by the Decree of the

President of February 25, 2011 No. 72

“On some issues of regulating prices

(tariffs) in the Republic of Belarus”

(public facilities for citizens, paid

medical services, medicines

produced by organizations of the

Republic of Belarus, oil products, gas,

alcohol, carriage and transportation

services, paid educational services,

socially important goods and others).

As for regulated goods (works,

services), national state administra-

tion bodies, regional and Minsk city

executive and administrative bodies

within the powers granted to them by

law shall effect administrative regu-

lation of prices (tariffs) by setting:

§ fixed prices (tariffs);

§ limit prices (tariffs);

§ limits of mark-ups (discounts)

to the prices;

§ limits of cost-effectiveness

standards used to determine the

amount of profit to be included into

the regulated price (tariff);

§ procedures for establishing

and applying the prices (tariffs);

§ indexation of prices (tariffs);

§ declaration of prices (tariffs).

7.3. Banking systemThe number of legal acts of the

Republic of Belarus is dedicated to

the regulation of the banking system

of Belarus, the main of which is the

Banking Code of the Republic of

Belarus. According to the provisions

of the Code, the Banking system of

Belarus consists of:

§ the National Bank of the

Republic of Belarus (it is the central

bank of the Republic of Belarus,

which regulates credit relations and

currency circulation, determines the

procedure of payments and has the

exclusive right of money emission);

§ other banks (24 banks are

registered in the Republic of Belarus

as of January 1, 2017, apart from the


National Bank).

However, the number of

commercial banks in the Republic of

Belarus has reduced over the year

2016: 26 banks were registered as of

January 1, 2015, apart from the

National Bank.

The financial credit system of

the Republic of Belarus along with

banks includes also non-banking

credit and financial institutions (as of

January 1, 2017, 3 non-banking credit

and financial institutions are

registered in the Republic of Belarus).

As compared to the year 2015, there

has been an increase of such entities:

only 1 non-banking credit and

financial institution was registered in

the Republic of Belarus as of January

1, 2016). It is worthy of note that one

of such entities was formed in 2016

due to a bank reorganization

(HKBank, JSC).

Non-banking credit and

financial institutions unlike the

banks do not have the right to

exercise the following banking

operations:

§ funds raising from legal

entities and (or) individuals to the

accounts and (or) to the deposits;

§ placement of the attracted

funds on its own behalf and for its

account on the terms of refundability,

serviceability and maturity;

§ opening and maintaining of

bank accounts of individuals and (or)

legal entities.

7.3.1. Banking principles

The main principles of banking

activities include the following:

1. obligatory licensing of banks

and non-banking credit and financial

institutions engaged in banking

activities (hereinafter – Banking

License);

2. independence of banks and

non-banking credit and financial

institutions in their activities and

non-interference of government

authorities into their work, except for

cases, provided for by laws of the


3. division of liabilities among

banks, non-banking credit and

financial institutions and the state;

4. compliance with safety

functioning standards introduced by

the National Bank of the Republic of

Belarus (hereinafter – the National

Bank) to ensure stability and

soundness of the banking system in


5. the right of individuals and

legal entities to choose banks and

non-banking credit and financial

institutions at their discretion;

6. the guarantee of confidential-

ity of clients transactions, accounts

and deposits;

7. guarantee of recovery of funds

placed by bank depositors.

7.3.2. Bank authorized fund and

its formation procedure

The bank authorized fund is

formed by contributions (assets) of its

founders (shareholders). The

authorized fund of bank determines

the minimum amount of the bank

assets to safeguard the interests of

its creditors.

A minimum amount of the bank

authorized fund is determined by the

National Bank upon approval of the

President of the Republic of Belarus.

Pursuant to the Resolution of the

Board of the National Bank of the

Republic of Belarus No. 380 of June

23, 2015 “On the minimum amount of

bank authorized funds”, as from

January 1, 2017, a minimum amount

of a bank's authorized fund was

established in the amount of 45

million Belarussian rubles.

When establishing a bank, the

minimum amount of its authorized

fund shall be formed by means of

cash contributions. For the formation

of the authorized fund only own

funds of the bank founders can be

used, and for the increase of the

authorized fund - own funds of the

bank founders, other persons, and/or

sources of own funds of the bank.

Own funds of a bank founder

(shareholder), other persons

comprise legitimately acquired

financial resources or other assets

owed by the named persons by virtue

of ownership or other proprietary

rights. Sources of the bank own funds

are the retained earnings of the bank

Finance and Banking System


from past years or the funds,

established from the bank profits, in

cases if such funds were not used.

The property can act as non-

monetary contribution into the

authorized fund of the bank required

for banking activity and related to

fixed assets, except for the unfinished

construction objects.

Monetary contributions to the

bank authorized fund are subject to

be transferred to a temporary account

opened by the bank founders or by

the bank in case of its authorized

fund increase at the National Bank or

other bank as agreed with the

National Bank. In case of opening of

the temporary account at the other

bank, monetary funds are transferred

to this temporary account through

the correspondent account of this

bank, opened in the National Bank of


Opening of the temporary

account is not required in cases of:

§ adoption of a legal act of the

Republic of Belarus, that provides for

making monetary contributions to

the bank authorized fund;

§ authorized fund increase at

the expense of sources of own funds

of the bank;

§ authorized fund increase at

the expense of credits (loans)

recognized as subordinated

according to the Belarusian legisla-

tion, which were placed at this bank

earlier.

7.3.3. Terms and conditions for

obtaining a banking license

According to Belarusian

legislation banking is a licensed

activity. Banking Licenses, including

the list of banking operations which

the bank is entitled to exercise, are

issued by the National Bank of the


The Bank is obliged to apply to

the National Bank for receipt of a

license to exercise banking activities

within ten months from the date of

state registration.

To obtain a banking license the

Bank must comply with the licensing

requirements which are established

by the National Bank.

Decision on the issue of license

(refusal to issue), on introduction of

amendments and (or) additions

(refusal to introduction) to the list of

banking operations specified in the

license issued to the bank is made by

the National Bank within a period not

exceeding two months from the date

of submission to the National Bank of

documents required to obtain a

license, to make amendments and

(or) additions to the list of banking

operations specified in such license.

Founders of the bank may apply

to the National Bank for receipt of a

license at the same time together

with the request of the state

registration of the bank on condition

of fulfillment of license require-

ments. The period of making a

decision on the issue of the license

may be extended to three months by

the National Bank.

If the bank does not receive a

license within twelve months from

the date of its registration, such bank

is subject to liquidation in accor-

dance with the procedure specified

by the legislation of the Republic of

Belarus by the decision of its

shareholders or bank authority

authorized to this by the charter, or by

the economic court for Minsk and for

Minsk region at the suit of the

National Bank.

The bank must have a stable

financial position over the last two

years or since obtaining a license, if

the license was obtained less than 2

years ago, in order to obtain the right

to exercise banking operations of

funds raising of individuals to the

accounts and (or) to the deposits,

opening and maintaining of bank

accounts of individuals. It is impera-

tive that the bank's regulatory capital

is in the amount of 45 million

Belarussian rubles (or 90 million

Belarussian rubles if the banking

license was obtained less than 2

years ago) as for the first day of the

month of submitting the documents

to the National Bank for making

amendments and (or) additions to

the list of banking operations which

the bank is entitled to exercise.

7.3.4. Additional requirements

for establishment and activities of

banks with foreign investments

The limit (quota) for foreign

capital participation in the banking

system of the Republic of Belarus is

set by the National Bank upon the

approval of the President of the

Republic of Belarus. As of January 1,

2017 the limit (quota) is set at the

amount not more than 50 percent.

The said quota shall be calculated as

the ratio of total non-resident capital

in aggregate authorized funds of

banks, founded by foreign investors,

and the total authorized fund of

banks registered in the territory of


The National Bank shall stop

registration of banks founded by

foreign investors once foreign capital

participation in the banking system

of the Republic of Belarus reaches

the established limit (quota).

Banks with foreign investments

are obliged on the basis of the

application to receive the permit

from the National Bank advance

applications to the National Bank to

increase the bank authorized fund

using non-resident resources and (or)

to dispose shares to non-residents.

Applications shall be considered by

the National Bank within thirty days

from the date of submission.

Transactions involving disposal

of shares to non-residents that are

concluded without authorization of

the National Bank shall be deemed

void.

The National Bank is entitled to

forbid any increase in the authorized

fund of a bank founded by foreign

investors at the cost of funds of non-

residents and (or) to dispose shares

to non-residents, if such actions

result in exceeding the limit (quota)

for foreign capital participation in

the banking system of the Republic of

Belarus.

The Government of the Republic

of Belarus on the proposal of the

National Bank are entitled to

introduce restrictions on banking

operations for banks founded by

foreign investors, if the respective



foreign states apply similar restric-

tions for the activities of banks with

investments of Belarusian citizens

and (or) legal entities of the Republic

of Belarus.

7.3.5. Representative office of a

foreign bank

Foreign banks are entitled to

open representative offices in the

Republic of Belarus. Five representa-

tive offices of foreign banks are

operational in the Republic of

Belarus as for January 1, 2017.

As for January 1, 2015 seven

representatives offices of foreign

banks were registered in the Republic

of Belarus.

A representative office of a

foreign bank is not a legal entity and

carries out its activity basing on the

Regulation approved by the parent

bank which established this

representative office.

A representative office of a

foreign bank is not entitled to carry

out banking operations and other

activities, except for protection and

representation of interests of the

parent bank by which it was estab-

lished, including consulting and (or)

information services.

The decision on the opening of a

foreign bank representative office or

denial of such opening is made by the

management of the National Bank

within the term not exceeding two

months from the date of submission

of documents required for the

opening of the representative office.

Denial of application for

opening a representative office of a

foreign bank may be passed due to

the following:

§ the information provided is

incorrect;

§ the Regulation on the

representative office does not

comply with the legislation of the


Representative offices of foreign

banks in the Republic of Belarus shall

be established for a maximum term

of three years. The operating term of

a foreign bank representative office

may be extended by the Deputy

Chairman of the Board of Director's

decision at the request of the

respective foreign bank provided that

the foreign bank applies to the

National Bank not later than one

month before the expiry of the permit

to open a representative office.

Decision on prolongation of the

operating term of a foreign bank

representative office is made within a

period not exceeding one month

from the date of submission of such

petition.

If such request is not submitted

within the specified term after the

termination of the validity period of

the permit for the opening of the

representative office, the record

about the representative office is

excluded from the register of foreign

bank representative offices, and the

National Bank notifies the foreign

bank of the case within five days.

7.4. Securities marketA number of legal acts of the

Republic of Belarus are dedicated to

security market regulation. The main

security regulations are the Civil

Code of the Republic of Belarus and

Law of the Republic of Belarus No.

231-3 “On the security market”

effective as from January 5, 2015

(hereinafter – “the Law”).

Under Article 1, part 1, para. 36 of

Law the security market is the system

of relationships between legal

entities and (or) private individuals

and also between other persons at

civil law during emission (issue),

transactions and redemption of

securities, pursuit of professional

and exchange activities in securities.

There are two types of securities

market: established and unestab-

lished. The established market is a

set of relationships related to the

security transactions in manager's

system of securities trading

including securities exchange.

However the security transactions on

the unestablished market are carried

out beyond the manager's system of

securities trading.

The Ministry of Finance is the

main administrative body of the

Republic of Belarus in securities

market regulation.

7.4.1. Types of securities

There are two types of securities

currency: issue and non-issue.

The issue securities are shares,

government bonds, bonds, other

types of securities, (including

derivative securities), related to the

issue securities according to the

legislation the Republic of Belarus on

securities market. The exchange-

traded bond and housing bonds also

belong to the issue securities.

The non-issue securities are

those which do not relate to the issue

ones.

According to the legislation of

the Republic of Belarus the issue

securities can be inscribed or bearer,

certificated or non-certificated.

The non-certificated issue

securities are the issued securities

which are emitted in the form of the

certain records' set in compliance

with the mandatory corporate

details.

The certificated issue securities

are the issue securities which are

emitted in the form of the paper

based documents (blanks) in

compliance with the mandatory

corporate details and other require-

ments to the securities' blanks.

Under the common rule the

inscribed issue securities can be only

non-certificated. The bearer issue

securities can be only certificated.

The shares and bonds issue

procedure (except for the exchange-

traded bonds) includes their

obligatory state registration in the

Ministry of Finance of the Republic of

Belarus.

7.4.2. Professional and exchange

activity on securities market. The

conditions of obtaining the license

on professional and exchange

activities pursuit

Professional and exchange

activity in securities – is an entrepre-

neurial activity in the deal imple-

mentation with securities (including

derivative securities), emitted

(issued) securities by third parties,

agency operations with securities

(including derivative securities) in



behalf of the client for the purposes

of profit (except the interest income

deals and (or) discount or dividends

deals, including professional

securities trader), in works or services

performance, connected with such

types of the deals and (or) rights

enforcement, certified by the

securities, and custody business

implementation and security trading.

This type of activity includes the

following works and services:

1. brokerage activity – is an

implementation of the securities

transactions by the professional

securities trader on the client's

behalf and for the client's account, or

on his own behalf and for the client's

account on grounds of the commuta-

tive engagement agreement or the

client's fees;

2. dealer activity – is an imple-

mentation of the securities transac-

tions by the professional securities

trader on his own behalf and for his

own account with rights of simulta-

neous turnaround, under the terms of

public tender offer with these

securities purchase obligation at the

rate of the price posted in the public

tender offer;

3. securities trust management

activity – is an implementation of the

securities transactions by the

professional securities trader on his

own behalf for remuneration within a

given time with the trusted owned by

third party securities, money for

securities purchase for further trust

management of these securities,

money and other securities obtained

during the securities trust manage-

ment;

4. clearing activity – is a

professional securities trader activity

The professional securities trader

activity in definition of obligations

and requirements dealing within the

account (collection, verification,

adjustment of information of the

securities transactions, draft

accounting documents) for supplying

the account for securities and money

transfer;

5. custody activity – is the

professional securities trader activity

in rendering the services of securities

discount, their rights and encum-

brances (restrictions) of the rights

with implementation of the system

of bailor's notes and securities and

custody of certificated securities, also

activities in securities transfer

(withdrawal, deposit) into the bailor's

account according to the securities

legislation of the Republic of Belarus;

6. securities trading activity – is

the professional securities trader

activity in rendering the services

encouraging further securities

transactions between professional

securities traders, legal entities - non-

residents, which have the right to

carry out professional securities

activity according to the interna-

tional law and (or) through organiza-

tion and securities bidding under the

rules set by the securities market

operator.

Professional and exchange

activity on securities market is

licensable. The licenses are issued by

the Ministry of Finance only to the

legal entities of the Republic of

Belarus.

The license on professional and

exchange activities pursuit can be

issued on several works and services

rendering, which are included in the

professional and exchange activity

on securities.

There is set of the requirements

imposed on the license applicants

and licensees for the implementation

professional and exchange activity

on securities market.. They are the

following:

§ conformance of the manager

and employees, which render

services within professional and

exchange securities activity, to the

qualifying requirements (except for

the bank and nonbank financial

institution managers);

§ conformance to the financial

sufficiency and the structure of

financial investments requirements

stated by the Ministry of Finance;

§ pursuit of professional and

exchange activity as an exceptional

one, except for the cases stated by the

legislative acts of the Republic of

Belarus (the requirements cannot be

applied to banks, nonbank financial

institutions, stock exchanges);

§ director and employees of the

licensee haven't unwithdrawn or

outstanding conviction for manufac-

ture, storage or sale of counterfeit

securities or other crimes against the

order of economic activities.

Banks and nonbank financial

institutions will obtain licenses for

professional and stock exchange

activities upon Belarusian National

Bank's consent to their securities

business activities.

An application for license must

be examined by the licensing

authority within 15 working days

from the day of document accep-

tance. As from March 1, 2016 there

are no time limits on license validity

periods. Moreover, those licenses

valid as of Novemer 28, 2015 will be

admitted as unlimited.


CurrencyControl and

foreign tradetransactions

8

54Doing Business in Belarus 2017Currency Control and foreign

trade transactions

8.1. Currency controlThe law of the Republic of

Belarus as of July 22, 2003 No. 226-З

“On currency regulation and currency

control” is the main legal act that

regulates activities of state bodies,

which are authorized to exercise the

currency control in the Republic of

Belarus, and also circulation of cur-

rency values, the scope of rights and

duties of participants of currency

operations, etc.

The Currency Control Law di-

vides currency transactions between

residents and non-residents into two

types as follows:

1. Current currency operations

(which are treated with fewer restric-

tions);

2. Currency operations associ-

ated with movements of capital (to

perform which the residents, as a

rule, needs special permissions of the

National Bank of the Republic of

Belarus).

Current currency operations are

carried out between Belarusian resi-

dents and foreigners without restric-

tions, except for currency operations

on transferring of funds by a resident

to a non-resident under gift (dona-

tion) agreements, which require a

permission of the National Bank of


The legislation provides a

closed list of current currency opera-

tions:

1. making settlements on trans-

actions for the export and/or import

of goods (except for the export and

import of money, securities and real

estate), proprietary information, ex-

clusive rights to the results of intel-

lectual activities, works, services;

2. making settlements on trans-

actions for transfer and (or) receipt of

property for leasing;

3. transfer and receipt of divi-

dends and other income, arising from

investments;

4. non-trading operations

which include:

§ transfer and receipt of funds

for payment of wages and salaries,

scholarships, pensions, alimony

payments, state benefits, allowances

and compensation, as well as

disbursements for damages;

§ transfer of funds to pay for an

employee's business trip expenses

outside the Republic of Belarus;


connected with the acceptance of

inheritance and the sale of such

inheritance;


relating to the burial of a deceased

person, including grants and

financial assistance for burial,

transportation and other expenses;

§ the receipt of monetary

compensation by victims of political

repressions, members of their

families and heirs;

§ transfer of cash for maintain-

ing diplomatic missions and other

official representative offices,

consular institutions of the Republic

of Belarus abroad;

§ receipt of cash by courts, the

international arbitration court, law

enforcement bodies, state offices of

notary public, the notarial bureaus, in

connection with their activities, and

also by state bodies or other

organizations in the process of

fulfillment of notarial actions by their

public officials;


under the judgment decisions and

rulings of the court and other service

documents;

§ transfers, connected with

payment of registration, entrance,

membership fees to funds, religious

or international organizations, as

well as other payments in connection

with participation in international

organizations;

§ transfer and receipt of

Belarusian rubles, foreign currency,

transfer and receipt of other currency

values under gift (including

donation) agreements, gratis aid

(sponsor support) contracts in

accordance with the laws of the


§ getting of currency values by

residents from non-residents for

storage;

§ transfers related to payment

of taxes and other compulsory

payments to the budget, which are

established by the legislation of the

Republic of Belarus or foreign states,

as well as their return;

§ transfers related to payment

of dues and other payments to patent

authorities;

§ transfers and receipt of funds

connected with participation in

conferences, seminars, sport events,

exhibitions, fairs;

§ transfers related to the return

of funds transferred erroneously and

(or) excessively;

§ other currency transactions

the list of which is established by the


or under his order by the Council of

Ministers as well as by international

treaties of the Republic of Belarus.

Currency operations associated

with movements of capital are those,

which are not considered as current

currency operations. They include

namely:

§ acquisition of stocks at the

time of their distribution among

founders, share in the authorized

fund or a stock in the property of non-

residents, as well as deposit into the

authorized fund of non-resident

when there is an increase;

§ acquisition from a non-

resident of securities, emitted

(issued) by non-residents, from non-

residents, except acquisition of

stocks at the time of their distribu-

tion founders;

§ acquisition into ownership of

property, situated outside the

Republic of Belarus and considered

as real estate under the Belarusian

law, as well as under the agreements

stipulated establishment of shared

construction units;

§ placements of money in banks

of non-residents or money transfer to

non-residents (except for non-

resident banks) under the terms of

trust management;

§ provision of loans;

§ receipt of financial credits

and/or loans under certain circum-

stances, particularly when rate of

interest for the use of the credit

and/or loan exceeds 14 percent per

year when making operations in

USD, euro;

§ settlements on obligations of

the subject of currency operations - a

resident (except for the bank), which

is a guarantor, surety before a non-

resident according to a guarantee or

surety contract, concluded between

them;

§ settlements on obligations of

the subject of currency operations - a

resident (except for the bank) before

non-residents according to the

agreement which stipulates debt or

claim assignment. Pursuit to this

agreement the subject of currency

operations – a resident incurs non-

resident's debt to another non-

resident or makes payment for

assigned claim.

The current legislation stipu-

lates several regimes for currency

operations associated with capital

movement. Thus, business entities

and private individuals carry out

currency operations associated with

capital movement with permission of

the National Bank, without limits or

having notified the National Bank.

For example, permission of the

National Bank is necessary while

carrying out currency operations

associated with acquisition of prop-

erty located out of the territory of the

Republic of Belarus and defined as

real estate by the legislation of the

Republic of Belarus and agreement

for share construction units.

The currency operations associ-

ated with acquisition of authorized

capital's shares or resident's property

unit by non-resident can be carried

out without any limits.

By giving a notice business

entities and private individuals carry

out current operations associated

with movement of capital which do

not require permission from the

National Bank and no limits are stip-

ulated by the legislation.

It is not required to obtain per-

mission of the National Bank to carry

out these currency transactions by

non-residents.

8.2. Implementation of

foreign-trade operationsExport and import transactions

are traditionally subject to special

oversight by the public authorities.

According to the Edict of the


as of March 27, 2008 No. 178, for each

foreign trade contract, providing

compensatory transfer of goods, total

value of which, taking into account

all appendixes and amendments to

the contract, is 3000 Euro in equiva-

lent or more, a resident is obliged to

register the transaction in its servic-

ing bank before fulfilling his obliga-

tions to a non-resident. Registration

takes place on the day of submission

of the document by which the foreign

trade contract is executed. The fee for

registration of the transaction is not

charged by banks.

The Edict stipulates time-

frames for completion of foreign

trade transactions which, as a rule,

are:

Doing Business in Belarus 2017 55Currency Control and foreign

trade transactions

January –

November 2015

January –

November 2016

January –

November 2015

to January –

November 2016,

%

January –

October 2016

January –

October 2016 to

January –

October 2015, %

Results

For reference only:

(under the updated information)

Export of goods and services 30 119,5 26 993,9 89,6% 89,5%48 720,9

Foreign trade turnover of goods

and services59 925,3 53 855,3 89,9% 89,5%48 720,9

Import of goods and services

Balance of foreign trade of goods

and services

Foreign trade turnover of goods

Export of goods (at FOB values)

Import of goods (at FOB values)

Balance of foreign trade of goods

Foreign trade turnover of services

Export of services

Import of services

Balance of foreign trade of services

29 805,8

313,7

49 926,6

24 109,9

25 816,7

-1 706,8

9 998,7

6 009,6

3 989,1

2 020,5

26 861,4

132,5

43 853,3

20 884,2

22 969,1

-2 084,9

10 002,0

6 109,7

3 892,3

2 217,4

90,1%

42,2%

87,8%

86,6%

89,0%

122,2%

100,0%

101,7%

97,6%

109,7%

24 232,6

255,7

39 578,6

18 917,3

20 661,3

-1 744,0

9 142,3

5 571,0

3 571,3

1 999,7

90,5%

30,3%

87,4%

85,4%

89,2%

172,4%

100,2%

101,5%

98,3%

107,7%

Information on foreign trade of goods and services of the Republic of Belarus

for January-November 2016¹ (Mln. US dollars)

¹ Source: National Bank of the Republic of Belarus (nbrb.by)

Doing Business in Belarus 2017 56Currency Control and foreign

trade transactions

§ for export – within 90

calendar days (within 120 calendar

days under a commission agreement)

from the date of shipping of goods

(transmission of proprietary

information, exclusive rights to the

results of intellectual activities),

works performance, services

rendering;

§ for import – within 60

calendar days from the date of the

payment.

Completion of foreign trade

transactions means, in particular,

cash inflow for the transferred goods

according to the foreign trade con-

tract for export, and receipt of goods

according to the foreign trade con-

tract for import (legislation also

provides the other methods of com-

pletion of foreign-trade transac-

tions).

The residents of the Republic of

Belarus can make advance payments

under foreign trade agreements

presupposing import without any

restrictions.

Tax Systemof the Republic

of Belarus9

50 057,8

26 991,8

21 525,2

1 540,8

7 591,2

2 435,5

5 155,7

55 104,5

30 490,7

2 790,7

891,1

599,7

16 894,1

330,3

12,9

5,8

193,3

6,7

838,4

2 050,6

-

0,3

18,3

1 781,7

489,8

921,3

18,7

37,4

20,2

16,1

1,2

5,7

1,8

3,9

41,2

22,8

2,1

0,7

0,4

12,6

0,2

0,01

0,004

0,1

0,005

0,6

1,5

-

0,0002

0,01

1,3

0,4

0,7

0,01

53 751,8

32 092,0

19 994,4

1 665,5

9 618,4

2 808,1

6 810,3

74 851,5

44 051,7

3 468,5

985,7

756,3

20 416,1

411,5

10,8

8,0

240,7

31,6

1 007,7

3 383,8

78,7

0,2

13,9

4 597,1

-

2 938,8

15,8

32,0

19,1

11,9

1,0

5,7

1,7

4,0

44,5

26,2

2,1

0,6

0,4

12,1

0,2

0,01

0,005

0,1

0,02

0,6

2,0

0,05

0,0001

0,01

2,7

-

1,7

0,01

60 859,1

37 009,1

21 818,8

2 031,2

12 335,9

4 208,2

8 127,7

79 097,1

47 957,1

3 936,1

902,7

840,1

18 786,4

424,0

11,3

10,0

-

45,4

1 048,8

5 045,4

89,7

-

25,9

4 985,6

-

3 884,5

10,7

31,5

19,2

11,3

1,1

6,4

2,2

4,2

40,9

24,8

2,0

0,5

0,4

9,7

0,2

0,01

0,01

-

0,02

0,5

2,6

0,05

-

0,01

2,6

-

2,0

0,01

157 303,5 81,4

Income of the budget of the Republic of Belarus controlled by the tax authorities under the types

of income sources for years 2011-2015

year 2013

Budget income controlled by the

Ministry of Tax and Duties, total133 900,5

year 2014 year 2015

Income tax type

100,0 168 148,8 100,0 100,0193 198,1

Income from taxes, including:

Income and profit taxes

Withholding tax

Profit tax

Income tax

Property tax

Land tax

Real estate tax (taking into

account tax for construction-

in-progress)

Tax for goods and services

VAT

Tax in Simplified Tax System

Single tax for individual

entrepreneurs and private

individuals

Single tax for agricultural

producers

Excise

Gambling tax

Deductions from procurement officer

Tax for having dogs

Allocations form incomes

received from rendering of

telecommunication services

(since 2015 are transferred to

state non-budgetary universal

service fund of the Ministry of

Communications)

Special fees (duties)

Ecological tax (since 2014

with account of utilization fee)

Tax for getting natural

resources

Single tax for temporary income

(introduced since 2014)

Single sales tax (abolished

since 2015)

Tax income from foreign trade

activities (offshore tax)

Other taxes, duties and other

compulsory payments

Allocations to innovation

funds ( since 2013 innovation

funds are formed due to

allocations from income tax)

State duty

Accrual from abolished

historic taxes

Other taxes, duties and

compulsory payments*

Ratio in

budget

income, %

bln. rubles

Ratio in

budget

income, %

bln. rubles

Ratio in

budget

income, %

bln. rubles

114 553,5 85,6 142 832,7 84,9

58Doing Business in Belarus 2017 Tax System of the Republic of Belarus

9.1. General information

59Doing Business in Belarus 2017

The Tax Code of the Republic of

Belarus, which is made up from the

Primary Part and Special Part, is a

ruling document identifying the

structure of the tax system of the


The Primary Part, which is effec-

tive from January 1, 2004 formulates

the notions of tax obligation, taxpay-

ers, an object of taxation. It also con-

tains regulations regarding tax ac-

counting and control, and describes

the procedure of appeal of decisions

made by tax authorities. The Special

Part of the Tax Code, that came into

legal force as of January 1, 2010, regu-

lates particular taxes and duties,

defines taxpayers, objects of taxation,

rates, procedure of tax calculation

and payments of respective taxes and

duties.

According to the Tax Code, the

tax payments existing in the Republic

of Belarus are subdivided on the

territorial basis and level of the sub-

ject, performing the legal regulation

of taxation, into republican taxes,

duties (tariffs) and local taxes and

duties.

Republican taxes include the

following:

џ value added tax;

џ profit tax;

џ excise duties;

џ tax on income of foreign

organizations, which do not

operate through a permanent

representative office in Belarus;

џ income tax on individuals;

џ property taxes;

џ land tax;

џ ecological tax;

џ tax on extraction (subtraction) of

natural resources;

џ duty for passage of automobile

vehicles of foreign states on

public roads of the Republic of

Belarus;

џ off-shore duty;

џ stamp duty;

џ consular fees;

џ state duty;

џ patent fees;

џ custom fees and duties;

џ disposal fee;

џ fee for public expenses financ-

ing.

Local taxes and duties include

the following:

џ dog owners tax;

џ resort levy;

џ levy for packer shippers.

There are also other types of

payments:

џ dues to the Social Welfare Fund

for social needs;

џ dues paid by employers for

obligatory insurance of employ-

ees against professional

illnesses and accidents at

production facilities.

9.2. Transfer pricing Tax consequences of the trans-

action mainly depend on the effec-

tive price of the relevant transaction.

However, in the number of cases

while calculation and payment of

taxes the business entities shall

apply market prices at risk that tax

authorities may adjust the calculated

taxes and bring business entities to

responsibility.

9.3. Taxation of business

entitiesTogether with general taxation

system, there are specific regimes of

taxation, which provide a number of

benefits, reduced tax rates, a com-

plete or partial deferral of some taxes

or even full exemption.

9.4. General system of

taxation: primary payments 1) Excise duties are used for

the following types of goods:

1. spirit;

2. alcoholic products;

3. non-food alcohol-containing

production;

4. beer, beer cocktail;

5. low alcoholic beverage with

overall volume part of alcohol from

1.2 to 7 %, wines with overall volume

part of alcohol from 1.2 to 7 %;

6. tobacco;

7. gasoline;

8. diesel fuel and diesel fuel

with methyl esters of greasy acid;

9. boat fuel;

10. liquefied hydrocarbon gas

and natural compressed fuel gas,

used as automotive fuel;

11. diesel motor oil and/or car-

buretor (injector) engine oil;

12. ciders;

13. food alcohol-containing

production.

Excise rates for goods can be set

in absolute amounts on a physical

unit of measurement of the goods

(fixed (specific) rate) or in percentage

points from the cost of goods (added

value rates).

351,9

19 347,0

7 809,2

5 652,6

958,7

0,3

14,4

5,8

4,2

0,7

1 642,5

25 316,1

12 070,9

8 064,7

1 379,8

1,0

15,1

7,2

4,8

0,8

1 090,3

35 894,6

17 963,5

8 100,1

1 804,6

0,6

18,6

9,3

4,2

0,9

Accrual from abolished

historic taxes

Other taxes, duties and

compulsory payments*

Non-tax income, including:

Taxes from use of property

owned by the state

Income from entrepreneurs

and other activities

Penalties, deductions

Other non-tax income ** 4 926,4 3,7 3 800,7 2,3 4,28 026,4

* other taxes, duties and compulsory payments include allocations to funds of preventive measures, visitors' tax etc.

** non-tax income include allocations paid by gas supply organizations, tax for outdoor advertisement installation etc.

Note: Slight deflections of total sums are connected with round-off errors

Tax System of the Republic of Belarus


2) The value added tax (VAT)

(hereinafter – VAT).

Major VAT rates:

— 0 % on the sale of:

§ goods placed under the

customs procedure for export and

exported (without obligation to re-

import into the territory of Belarus) to

the states-members of the EEU;

§ activities (services) connected

with accompanying, loading, transfer

and other similar activities directly

connected with the selling of

exported goods, which are placed

under the customs procedure of

export , as well as goods exported

(without obligation to re-import into


Belarus) in the states - members of

the Customs Union;

§ exported transport services

including transit transportation, and

also exported work (services) to

produce goods from take-back

feedstock;

§ repair works (modernization,

re-equipment) of aircraft and their

engines, units of trains, performed for

foreign organizations or individuals;

§ § goods of own production to

owner of duty-free shop for their

subsequent implementation in duty-

free shops;

§ goods in retail trade through

shops to individuals who do not have

permanent residence in the country -

a member of the EEU, in case of

export of goods by foreign persons

outside the customs territory of the

EEU within three months from the

date of purchase of the goods;

§ bunker fuel for fueling

airships of the international airlines,

performing international flights

and/or air delivery;

§ services, rendering in the

airports of the Republic of Belarus

and airspace of the Republic of

Belarus, connected with mainte-

nance airships, performing interna-

tional flights and/or international air

delivery, including air navigation

services, according to the authorized

by the government list of services;

§ works (services), connected

with service and technical support of

the vehicles, registered in the foreign

country, performed on the territory of

the Republic of Belarus by the

authorized service center for


All types of controlled transactions in 2017 are defined in the following chart:

Realization or purchase of real estate (its part)

Group of transactions

Real estate

transactions

Sum limits of transaction

(transaction with one

party)

Deviation of price

from market valueNature of transaction

Transfer of co-invested construction unit to the investor and

of the domestic and (or) nondomestic premises to the

housing bonds' owner

Realization or purchase of housing bonds in the process of

their circulation (except for emitters' transactions with bonds

of their own emission) performed after state registration of

construction object.

Irrespective of

transaction sum

More than on 20%

of market value

Foreign trade transactions with related party or offshore

zones' resident, with participation of the third party –

mediator.

Foreign trade

transactions

Exceeds 100 000

Belarusian rubles

during tax period

More than on 20%

of market value

Transactions with

parties, which do not

pay income tax

Transactions on realization or purchase of goods (works,

services) performed with the related party – tax resident of

the Republic of Belarus (including third party-mediator) if

this related party does not pay income tax on legal grounds.

For example in the case of application of simplified tax

system, pursuit of activities of the territory of small cities etc.

Exceeds 100 000

Belarusian rubles

during tax period

More than on 20%

of market value

Foreign trade

transactions with

special parties

members

Realization or purchase of goods (works, services) due to

foreign trade activity of the enterprise engaged in realization

(purchase) of strategic goods included in the list defined by

the Government of the Republic of Belarus.

Realization or purchase of goods (works, services) due to

foreign trade activity of the enterprise included in the list of

large taxpayers. The enterprises are informed by the tax

authorities on adding to the list of large taxpayers to January

1 of the year when the enterprise will be regarded as large

taxpayer.

Exceeds 1 000 000

Belarusian rubles

during tax period

More than on 20%

of market value

The rules of transfer pricing are applied only to income tax.

More than on 20%

of market value

More than on 20% of

market value. The bond

value compares with the

value of identical

(homogeneous) reals

estate.

More than on 20%

of market value


international enterprises and private

individuals except for the citizens of


§ selective types of works

(services), performed (rendered) by

the state union “Belarussian railway”

to the foreign public transport

companies.

– 9.09 % or 16,67 %:

§ on sales of goods (works,

services) at administered retail prices

with due account for the VAT.

– 10 %:

§ on sale of goods of Belarusian

origin from crop production (with the

exception of floriculture, growth of

ornamental plants), bee-farming,

livestock breeding, (with the

exception of fur farming), fishery;

§ on importation and (or) sale in


Belarus of foodstuffs and goods for

children that are included in the list

approved by the President of the


§ on sale of goods of own

manufacture by residents of free

economic zone in the territory of the

Republic of Belarus which were

manufactured by them on the

territory of the free economic zone

and are import substitution accord-

ing to the list of import substitution

goods, defined by the Government of

the Republic of Belarus in coordina-

tion with the President of the


– 20 %:

§ on the sale of property rights,

as well as the sale of goods (works,

services) not mentioned above, with

the exception of the ones, exempted

from taxation and not recognized as

subject to VAT.

– 25 %:

§ on the sale of telecommuni-

cation services.

The sum of VAT, subject to be

paid to the state budget, is defined as

difference between general sum of

tax, calculated at the end of the re-

porting period and the sums of tax

reductions. The calculated sum of

VAT is determined on an accrual

basis since the beginning of the tax

period at the end of each reporting

period.

As a general rule, VAT deduc-

tions are made on an accrual basis in

limits of sums of VAT, calculated after

realization of the goods (works, ser-

vices), proprietary interests. The main

exception to this rule are the paid

amounts of VAT on goods (works,

services) subject to taxation at the

rate of 0% and 10%.The deduction of

such amounts of VAT is made in full

regardless of the calculated amount

of VAT. The basis to claim a VAT

credit is an online Invoice prepared

according to the established proce-

dure.

Tax period of VAT is a calendar

year.

The reporting period of VAT for

payers, who render telecommunica-

tion services to subscribers is calen-

dar year.

In other cases reporting period

of VAT is a calendar month or a cal-

endar quarter.

Taxpayers submit tax declara-

tion (calculation) to the tax bodies

not later than on the 20th date of the

month, following the expired report-

ing period.

Payment of VAT is made not

later than on the 22nd date of the

month, following the expired report-

ing period.

3) Profit tax.

The objects subject to profit tax

are gross profit as well as dividends

and similar incomes, gained by

Belarusian organizations.

Gross profit for Belarusian

organizations is the sum of profit

from realization of goods (works,

services), proprietary interests and

non-realization incomes, decreased

by the sum of non-realization ex-

penses.

Main rate of the profit tax is 18%

The tax rate on dividends is

12%.

Tax period of profit tax is a

calendar year.

Reporting period of profit tax is

a calendar quarter. Reporting period

of profit tax on the dividends accrued

by Belarusian organizations is a cal-

endar month.

Profit tax for the reporting

period shall be calculated cumula-

tively from the beginning of the tax

period as the tax base, reduced on the

amount of profit exempted from

taxation, as well as at the fourth quar-

ter-end on the amount of losses car-

ried by profit of the accounting period

and the tax rate.

Tax return of profit tax on the

basis of past reporting period must

be submitted to the tax authorities

no later than the 22nd of the month

following expired reporting period,

regardless objects of taxation pres-

ence or absence.

Profit tax payment should be

made during the tax period on the

basis of past reporting period no later

than the 22nd of the month following

expired reporting period.

Profit tax payment for the fourth

quarter of 2016 should be made no

later than December 22 of this period

in the amount of 2/3 of tax profit sum

calculated on the basis of the tax

profit amount for the third quarter of

the tax period, followed by recalcula-

tion as a whole for the tax period and

calculating the amount of tax profit

to surcharge or reduction no later

than March, 22 of the year following

the expired tax period.

4) Profit tax of foreign organiza-

tions which do not operate in Belarus

by virtue of the permanent represen-

tative office.

Taxpayers of the profit tax of

foreign organizations which do not

operate in Belarus by virtue of the

permanent representative office are

recognized as foreign and interna-

tional organizations, including non-

legal bodies not operating in the

Belarus by virtue of the permanent

representative office, but to produce

income from sources in the Republic

of Belarus.

The object of taxation is the

following income received by tax-

payer from sources in Belarus:

1. conveyance fee, freight, de-

murrage and other payments arising

from the transportation in connec-

tion with the carrying out of interna-

tional carriage (except for passen-



gers transportation in international

traffic, the carriage fees, freight and

demurrage, arising during the inter-

national carriage of goods by sea), as

well as for the provision of freight

forwarding services (except services

of forwarding activities in the organi-

zation of international carriage of

goods by sea);

2. income from debt instru-

ments of any kind , including:

§ income on credits and loans;

§ income from securities, which

terms of emission is intended to gain

profits in the form of interests

(discount);

§ income from the use of

temporary available funds in bank

accounts in Belarus;

3. royalty;

4. dividends and similar income;

5. income from the sale of goods

in the territory of the Republic of

Belarus under the contracts, commis-

sion and other similar civil-law con-

tracts;

6. income from holding and (or)

participation in concert and enter-

tainment events, including attrac-

tions, zoos, circus programs in

Belarus;

7. income in the form of penal-

ties (fines) and other types of sanc-

tions for breach of contract;

8. income from research, devel-

opment work, development of design

and technological documentation for

the prototype (experimental batch)

of products, from the manufacture

and testing of prototypes (experi-

mental batch) products, pre-project

work and project work (preparation

of feasibility studies, engineering

efforts and other similar works);

9. income from the guarantee

and/or surety;

10. income from the provision of

disk space and/or a communication

channel for placing information on

the server and services for its mainte-

nance;

11. income from the alienation

of:

§ real estate situated in Belarus;

§ enterprise (or part thereof) as

a property complex located in the

territory of Belarus, owner of which is

a foreign organization;

§ securities in the territory of

Belarus (except for stocks) and/or

their redemption;

§ shares in the authorized fund

(stocks) of organizations in Belarus,

or their parts;

12. income from services:

§ consulting, accounting,

auditing, marketing, legal, engineer-

ing;

§ trust management of real

estate situated in the territory of

Belarus;

§ courier;

§ mediation (except for incomes

received from services in booking

passengers' transport in interna-

tional transportations, accommoda-

tions; agent services in booking,

registration and (or) realization of

passengers' transport in interna-

tional transportations; services in

choosing the rout of passengers'

transport in international

transportations);

§ management;

§ sourcing and/or selection,

recruitment of personnel, as well as

representation of personnel to carry

out their activities in the Republic of

Belarus;

§ in education;

§ training;

§ possession of property;

§ insurance;

§ advertising (except for income

paid to foreign organizations

associated with the participation of

Belarusian organizations and

Belarusian entrepreneurs in

exhibitions and fairs in foreign

countries, irrespective of whether the

income payment is made directly by

the participant of exhibitions and

fairs, or through another organiza-

tion or an entrepreneur);

§ installation, commissioning,

testing, maintenance, measurement,

testing lines, machinery, equipment,

devices, appliances, buildings and

intangible assets in the territory of

Belarus (except for income derived

from training, consultation and/or

services in installation, commission-

ing, testing, measuring and testing

lines, machinery, equipment,

appliances, fixtures and facilities,

which are indispensable for the

foreign trade contract for their

purchase in property (for temporary

use));

§ maintenance and protection

of freights (excluding revenues from

services on obligatory maintenance

and protection of freights, stipulated

by the legislation of the state through

which territory the freight is being

moved, rendered by the foreign state

organizations, the legislation of

which establishes requirements for

such obligatory maintenance and

protection);

13. income from real estate

situated in the territory of Belarus,

handed into trust management;

14. income from the data pro-

cessing and data placement (data

processing services, web-hosting

(including range of services for place-

ment and management of the web-

sites); the range of services for pro-

cessing data provided by the client,

preparation of the specialized re-

ports on the basis of the said data;

data input and processing services,

including data base management;

data storage services; access services

to data bases; provision of place and

time for advertisement in the

Internet as well as incomes from

web-ports for operating of the web-

sites using search systems to create

and maintain wide data bases of the

Internet-addresses and content en-

abling quick data search; (except for

the income received by foreign orga-

nizations in the Republic of Belarus

from services rendered of off-

exchange transactions registration,

an automated system of interbank

payments, international payment

systems, international telecommuni-

cation systems of information trans-

mission and (or) making payments).

The tax base of profit tax is

defined as total sum of income, for

certain types of income the costs,

proved by documents are allowed to

be deducted.

The rates of profit tax depend



on the type of income and may

amount to 5%, 6%, 10%, 12% and

15%.

The tax period of profit tax is a

calendar month, when the date of the

obligation to pay profit tax takes

place.

The tax return (calculation) of

profit tax is submitted by a legal

entity of Belarus, a foreign organiza-

tion, individual entrepreneur or pri-

vate individual, that accrue and/or

pay income of a foreign organization

which does not operate in Belarus

through the permanent representa-

tive office, to tax bodies at the place

of registration of these legal entities,

foreign organizations, or individual

entrepreneurs not later than on the

20th of the month following the tax

period.

Profit tax is to be paid not later

than on the 22nd of the month fol-

lowing the tax period.

5) Real estate tax.

The objects of taxation by real

estate tax for organizations are per-

manent structures (buildings and

structures) including the above norm

unaccomplished construction; park-

ing places; objects the creation,

change or origin of which is the sub-

ject to state registration as well as

transfer of ownership, operating

control or management, such objects

are registered with (on the balance

sheet) enterprises-taxpayers till

state registration of their creation,

change or origin, transfer of owner-

ship, operating control and manage-

ment;; as well as objects of the state

property which were transferred to

the joint stock companies estab-

lished during the transformation

process of rental enterprises, collec-

tive (people's) enterprises, state and

state unitary enterprises.

Taxable amount of real estate

tax is defined by organizations on the

basis of buildings, structures, their

parts and parking places, existing on

the 1st of January of the calendar year

based on residuary value and value of

permanent structures (buildings,

structures) of the above norm unac-

complished construction.

As a general rule, annual tax

rate of real estate tax for organiza-

tions is 1 %. Local authorities may

increase tax rates, but not more than

in 2,5 times. The annual tax rate of 2

% is established for the objects of the

above norm unaccomplished con-

struction. Tax period of real estate tax

is one calendar year.

The tax return is filed with (to)

the tax authorities not later than

March 20 of the year.

Real estate tax is paid by organi-

zations of their choice once a year in

the amount of annual sum of the tax

not later than on March, 22 of the tax

period or every three months not

later than on the 22nd day of the

third month of each quarter in the

amount of one-fourth of the annual

amount of tax.

6) Ecological tax.

Ecological tax is levied from

entities that exploit natural re-

sources and entities the activities of

which pollute the environment. The

law stipulates a number of rates for

the ecological tax. Depending on the

particular subject of taxation there

are fixed rates for emissions of pol-

lutants into the air, stated in the per-

mission of emission of pollutants

into the air and complex environ-

mental permits, and wastewater

discharges, storage and disposal of

industrial wastes.

Tax period of ecological tax is

one calendar quarter. Each quarter

tax payers submit the tax declaration

(calculation) to the tax bodies not

later than on the 20th of the month,

following the expired tax period.

Tax returns for industrial waste

storage on the objects for waste stor-

age shall be submitted by the taxpay-

ers – owners of the objects for waste

storage to the tax authority not later

than 20th of the month following the

reporting quarter when tax liability

on ecological tax occurred.

Ecological tax is to be paid each

quarter not later than 22nd of month,

following expired tax period.

The amount of the environmen-

tal tax may be calculated on the basis

of the amounts of emissions of pol-

lutants into the atmospheric air,

wastewater discharges, storage of

pollutants specified in the permits for

emissions of pollutants into the air,

special water use, storage or inte-

grated environmental permits and

the corresponding rates of ecological

tax. In this case, the tax declarations

(calculations) are to be submitted not

later than on April, 20 of the calendar

year on the basis of the annual

amount, and the payment of the eco-

logical tax is made on the tax payer's

option once a year in the amount of

the calculated amount for the year

not later than on April, 22 of the cal-

endar year or every quarter not later

than on the 22th of the month, fol-

lowing the accounting quarter in the

amount of one-fourth of the calcu-

lated amount of the environmental

tax.

Such taxpayers provide addi-

tional payments of the ecological tax

not later than on February, 20 of the

year following the expired year, on

the basis of actual annual emissions

of pollutants into the atmosphere,

wastewater discharges, storage and

disposal of wastes, and not later than

on February, 22 of the year following

the expired year. In case when the

mentioned volumes do not exceed

the established annual limits, the

overpaid amounts of the environ-

mental tax are to be earned forward

or returned to the payers.

7) Tax for the extraction (re-

moval) of natural resources.

The tax base is defined as the

actual volume of extracted (with-

drawn) natural resources. A list of

such natural resources is determined

by the Tax Code of the Republic of

Belarus and includes extraction of:

§ forming, glass-making and

mortar sand;

§ sand-gravel mixtures;

§ building and facing stone;

§ surface and underground

water;

§ waters, polymetallic water

concentrate, mineralized water

which is extracted to maintain the

pressure in oil recovery;

§ ground for land structures;



§ clay, sand clay, clay loam and

bergmeal;

§ bentonitic clay;

§ potassium salt (in terms of

potassium oxide) and halite;

§ oil;

§ chalk-stone, malm, limestone

and dolomite;

§ plaster-stone (anhydrite);

§ ironstone;

§ peat with humidity of 40%;

§ sapropel with humidity of

60%;

§ bog oak;

§ amber;

§ gold;

§ grapevine snail;

§ chironomid larvae;

§ green frog (pond, edible, lake);

§ adder;

§ brown coal (in terms of

standard fuel);

§ oil shale (in terms of standard

fuel);

§ long-fingered (narrow-

clawed) crayfish.

Tax rates are established in

Belarus rubles to the scope of pro-

duction (withdrawal) of natural re-

sources (except for potassium salt

and oil).

The tax period of tax for the

extraction of natural resources, ex-

cept for the tax for the extraction

(removal) of natural resources re-

garding oil and potassium salt is a

calendar quarter.

The tax period of tax for the

extraction (removal) of natural re-

sources regarding oil and potassium

salt is a calendar month.

Tax declarations (calculations)

for the tax for the extraction (re-

moval) of natural resources must be

submitted to the tax office not later

than on the 20th of the month fol-

lowing the expired tax period.

Payment is made every quarter not

later than on the 22th of the month,

following the expired tax period.

The amount of the tax for the


sources, except for the tax for the


sources regarding oil and potassium

salt may be calculated by payers on

the basis of the volumes of extraction

(removal) of natural resources speci-

fied in the documents on the basis of

which they are extracted (removed)

and the corresponding tax rates for

the extraction (removal) of natural

resources. In this case, the tax decla-

rations (calculations) must be sub-

mitted not later than on April, 20 of

the calendar year. The tax is paid at

the end of the tax period, not later

than on the 22th of the month, fol-

lowing the accounting quarter, in the

amount of one-fourth of the calcu-

lated tax amount for the extraction

(removal) of natural resources. At the

end of the year, based on the actual

volume of extraction (removal) of

natural resources, recalculation of

the amount of tax which should be

paid is hold and the tax declarations

(calculations) are to be submitted not

later than on the 20th of February,

following the expired year.

8) Land tax.

Land tax is levied from land

plots, located in the territory of

Belarus:

§ which are owned by the

individuals under the right of

ownership, lifetime inheritable

possession or temporary use as well

as inherited;

§ which are owned by the

organizations under the right of

ownership, permanent or temporary

use.

§ which are assigned for

temporary use and untimely returned

in accordance with the law, willfully

occupied, used other than as

intended.

Taxable amount of land tax is

generally defined in the amount of

cadaster value of a land plot.

Tax rate of land tax depends on

the function of the land plot. As a

general rule local councils of depu-

ties have the right to increase (de-

crease) the rate of land tax to certain

categories of taxpayers but not more

than in a two and a half amount.

Tax period of land tax is a calen-

dar year.

Tax payers-organizations sub-

mit to the tax authorities declara-

tions (calculations) on land tax annu-

ally, not later than on February, 20 of

the current year and on new land

allocation or on the termination of

the right of permanent, temporary

use or private property right for a

land plot (except for land plots, in

respect of which the decision that is

the basis for the creation or transfer

of the right for a land plot, is taken by

the authorized state body, or the right

to use the land is terminated in

December of the current year) not

later than on the 20th of the month

following the month in which the

decision that is the basis for the cre-

ation or transfer of the right for a land

plot is taken by a state body, or the

right to use it is terminated.

Land tax is paid by organiza-

tions:

§ according to a general rule, on

the choice of the organization

without changes during the tax

period once a year, in the amount of

the calculated amount for a year - not

later than on February, 22 of this year,

or every quarter not later than on the

22th of the second month of each

quarter - in the amount of one-forth

of the annual amount of land tax;

§ for agricultural land – on the

choice of the organization without

changes in the tax period once a year,

in the amount of the calculated

amount for a year not later than on

April, 15 of the current year, or not

later than on April 15, July 15,

September 15, November 15 - at the

rate of one-fourth of the annual

amount of the land tax; for the land

granted to taxpayers from (after)

January 1 of the current year, in case

of loss of the right for benefits for the

calculation of land tax in the process

of the transition of organizations

from special taxation to the general

taxation regime; in the process of the

payment of the land tax for land plots

under the objects of above norm

unaccomplished construction, in case

of providing by organizations and

individual entrepreneurs for rent,

other onerous or gratuitous use of

land, capital (buildings and struc-

tures), their parts, car places, located



on land plots, which are exempt from

land tax, as well as permanent

structures (buildings and structures),

their parts, car places of state-

financed organizations the payment

of land tax is made not later than by

the date, corresponding with the

nearest legal term of payment after

the submission of the tax return

(declaration) for the land tax, and for

the land plots on which the decision,

that is the basis for the creation or

transfer of the right for a land plot, is

taken by the authorized state body - in

November of the current year - not

later than on December 22.

Land tax for rented land plots is

levied in the amount, defined by

legislation, according to the proce-

dure similar to the calculation of the

land tax.

9) Obligatory insurance pay-

ments to the National Social Security

Fund. Insurance fees for obligatory

insurance against occupational dis-

eases and accidents at production

facilities.

The amounts of obligatory in-

surance payments for retirement,

disability, loss of breadwinner insur-

ances (pension insurance) is 28 % for

employers and 1% for employed

people.

The amount of obligatory fees

of insurance in case of temporary

incapacity for work, pregnancy and

childbirth, care for children under 3

years, granting of one day-off in a

month for a mother (father, guardian),

bringing up the child with disabilities

in the age of under 18 years, death of

insured person or a member of his

(her) family (social insurance) for

employers, natural persons inde-

pendently paying obligatory insur-

ance payments (except for the citi-

zens working outside Belarus),

Belgosstrakh (for persons who re-

ceive additional payments to a

monthly average wage or receive

disability benefit) is 6%.

Insurance fees for obligatory

insurance against occupational dis-

eases and accidents at production

facilities is established in the amount

of 0,6 % for all organizations (except

for the state-financed ones) with the

possibility of benefits, discounts

(increases) to the established rate.

10) Income tax of individuals.

The object of taxation of in-

come tax of individuals is income,

earned by taxpayers from the sources

in Belarus as well as abroad.

Organizations that hire employ-

ees on the basis of labour contract or

civil-law contract, fulfill obligations

of tax agents and withhold the taxes

from incomes of citizens and transfer

them to the state budget. The most

widespread source of income of natu-

ral persons, paid by organizations, is

remuneration for labour or other

duties, including monetary remuner-

ation and other allowances.

Belarusian legislation provides for

various deductions, reducing the

taxable income of individuals.

General rate of income tax is

13%.

The income tax rate is set at 9%

of the income received by:

§ individuals (other than

employees performing maintenance

and security of buildings, land) from

the residents of the High-Tech Park

(HTP) on the basis of labor agree-

ments (contracts);

§ individual entrepreneurs -

residents of the HTP;

§ individuals involved in the

implementation of the registered

business project in the field of new

and high technology, from non-

residents of HTP on the basis of labor

agreements;

§ individuals in the form of

wages received on the basis of labor

agreements (contracts) from the joint

venture, and (or) the residents of the

Chinese-Belarusian Industrial Park.

The income tax rate is set at

16% in respect of the income,

received by:

§ Belarusian individual

entrepreneurs (notaries, solicitors)

from business (notary, individually

conducted advocacy) activities;

§ calculated by the tax authority

on the basis of the excess amount of

expenditure over income pursuit to

the legislation.

The income tax rate paid by the

private individuals is set at 4% from

the income received in the form of

gains (refund non-triggering bet)

paid by gambling games sponsors-


Belarus to private individuals.

Organizations – tax agents are

obliged to withhold the calculated

sum of income tax from individuals

directly from the income of the payer

at the moment of their actual pay-

ment.

Tax agent has to withhold the

calculated sum of income tax form

individuals. Such a withholding is

produced from any monetary assets

paid to a taxpayer by a tax agent.

Withholding is to be made at the

moment of payment to a taxpayer or

to third parties on behalf of him (her).

The tax period of the income tax

from individuals is a calendar year.

Accounting periods of the income tax

from individuals for individual entre-

preneurs (private notaries, advo-

cates) are three, six and nine months

of the calendar year and a calendar

year.

9.5. Special tax regimesThe legislation provides the

following main special tax regimes

for business entities:

џ Simplified tax system;

џ Single tax from individual

entrepreneurs and other

individuals;

џ Single tax for producers of

agricultural products;

џ Tax for gambling business;

џ Tax on income from lottery

activity;

џ Tax on income from electronic

interactive games;

џ Single tax on imputed income.

Let's review the most favorable

taxation systems for foreign inves-

tors in the Republic of Belarus.

9.5.1. Simplified taxation

system

The scope of the system is activ-

ity of small enterprises with the level

of income no higher than the size,

stated by the legislation.

Organizations willing to use the



simplified tax system are required to

simultaneously comply with the two

criteria of average number of workers

and gross proceeds within the initial

nine months of the year previous to

the year of system application. The

following organizations may apply:

organizations with an average num-

ber of workers of not more than 100

persons, individual entrepreneurs

and notaries performing notarial

activities in notary's offices, and

attorneys-at-law (hereinafter for this

tax regime – individual entrepre-

neurs), provided the amount of their

gross proceeds for the nine months

on an accrual basis would corre-

spondingly make no more than

1,159,800 and 126,700 Belarusian

rubles.

Under the simplified tax system

a vast number of taxes are replaced

by one tax with a simplified proce-

dure of calculation. However, the

simplified tax system doesn't replace

the obligation to pay:

§ import and export payments;

§ stamp, consular, off-shore

fees;

§ patent, official fees;

§ duty for passage of automo-

bile vehicles of foreign states on

public roads of the Republic of

Belarus;

§ tax on profits from securities,

dividends, income of the members

during the liquidation of organiza-

tion, withdrawal of the member from

the membership, exceeded his

capital contribution or the actual

expenses of the member on the share

purchase of the share capital; profits

in the form of shares in the share

capital, in the form of increasing the

nominal value of the shares

produced due to the shareholders

equity, if the percentage share of any

member of the share capital of the

enterprise changes by more than

0.01 per cent; profit of the enterprise

according to the Trust Agreement of

financial resources management, to

the Trust Agreement of securities

management, to the Trust Agreement

of bank funds management, where it

is stated as trustor; the difference

between the estimated value of the

property transferred by the payer as a

non-monetary contribution to the

share capital of the enterprise and

the carrying value of the property;

profits from the alienation of shares

in economic societies;

§ VAT from turnover of

realization of goods (works, services),

property rights, except for the

business entities with not more than

50 employees from the beginning of

the year till the reporting period, if

the amount of their gross proceeds

from the beginning of the year on an

accrual basis and makes not more

than 1 058 400 of Belarusian rubles,

and individual entrepreneurs.

However, the general procedure

remains the same for calculation and

payment of VAT by individual

entrepreneurs from the turnover of

realization of goods (works, services),

property rights to business entities

(except for joint-stock companies) by

members, owners of which are said

individual entrepreneurs, their

spouses, parents (adoptive parents),

children (adopted children) if total

proceeds from realization of goods

(works, services), property rights for

three previous successive months

increases 40 000 Euros on the basis

of the exchange rate of the

Belarusian ruble to Euro defined by

the National Bank of the Republic of

Belarus effective within the last day

of the last said month ex. taxes and

fees paid from the proceeds:

§ land tax (except payers –

budgetary organizations, agricul-

tural-use rural lands);

§ real estate tax (if the total area

of all real estate objects exceeds

1000 square meters);

§ tax on extraction (subtraction)

of natural resources;

§ ecologic tax for the burial

wastes on the places of the burial

waste sites (if the tax payers was not

the owner of the profits);

§ disposal fee;

§ profit tax from the individual

entrepreneurs who simultaneously

are:

§ private individuals – mem-

bers, owners of the business entities

(except stock company), according to

the profit received from the entities;

§ spouses, parents (adoptive

parents), children (adopted also),

members, owners of the business

entities (except stock company),

according to the profit received from

the entities.

Some restrictions for applica-

tion of the simplified tax system are

stipulated with regard to certain

types of activities as well as for cer-

tain categories of business entities

and individual entrepreneurs.

If gross proceeds for calendar

year on an accrual basis exceed 1 542

600 of Belarusian rubles and/or the

number of employees is more than

100 then an organization is obliged

to apply the generally established tax

system.

If the simplified tax system is

applied, the tax basis is the amount of

proceeds from realization of goods

(works, services), property rights and

non-operating proceeds.

Currently business entities can

use the following variants of the

simplified tax system:

§ tax at a rate of 5 % – for legal

entities and individual entrepre-

neurs, which do not pay VAT. This rate

can be applied and VAT can be not

paid by organizations which have not

more than 50 employees in case their

gross profit doesn't exceed 1 058 400

of Belarusian rubles and individual

entrepreneurs;

§ tax at a rate of 3 % – for legal

entities and individual entrepre-

neurs, which do pay VAT;

§ tax at a rate of 16% – for legal


with regard to donated goods (works,

services), property rights, money.

Business entities with less than

15 people and a gross revenue up to

410 000 of Belarusian rubles, paying

tax in accordance with the simplified

tax system and individual entrepre-

neurs are exempt from accounting

recording and reporting and make

recording in the book (ledger) of

incomes and expenses of legal enti-

ties and individual entrepreneurs,



using the simplified tax system. Such

business entities and individual en-

trepreneurs are entitled to make

accounting recording and reporting

on the general basis.

A tax period of tax under the

simplified tax system is a calendar

year.

A reporting period of tax under

the simplified tax system is recog-

nized as:

§ a calendar month – for entities

applying the simplified tax system

with payment of VAT monthly;

§ a calendar quarter – for

entities applying the simplified tax

system without payment of VAT or

with payment of VAT quarterly.

A tax declaration is submitted

no later than the 20th day of the

month following the expired tax

period.

Tax under the simplified tax

system is paid no later than the 22nd

day of the month following the ex-

pired tax period.

9.5.2. Tax on gambling business

The activities in the gambling

business is carried out exclusively by


Belarus.

Organizations are exempt from

VAT (except VAT at import) and profit

tax in the sum of income received

from gambling business. As for activi-

ties which do not relate to gambling,

organizations pay taxes according to

the common rules.

The objects of tax on gambling

business are: gambling tables; slot

machines; bookmaker office coun-

ters; totalizator counters; positive

margin between the amount of ac-

cepted bets in gamblings and the

amount of paid wins (returning of

unplayed bets).

These first four objects are

registered in the tax office in witness

whereof the payer certificate is

issued.

Gambling tax rates installed per

taxation unit are as follows:

§ 6,341.87 Belarusian rules –

game table;

§ 241.53 Belarusian rules – slot

machine;

§ 1,300.13 Belarusian rules –

totalizator counter;

§ 650.07 Belarusian rules –

bookmaking office counter.

The tax rate on positive margin

between amount of accepted stakes

in gamblings and the amount paid

wins (unplayed return stakes) is 4%.

The amount of tax on gambling

business is calculated as the product

of the tax base and tax rate deter-

mined for corresponding object of

taxation for tax on gambling busi-

ness at the location of the object.

The tax period of tax on gam-

bling is a calendar month. Payment of

tax on gambling is made no later

than the 22th of the month following

the expired tax period.

9.5.3. Taxation in middle, small

towns and in countryside

Commercial organizations and

individual entrepreneurs (hereinafter

– business entities) established and

carrying out activities for the produc-

tion of goods (works, services) in the

territory of Belarus in middle, small

towns and in a countryside (hereinaf-

ter – countryside) are subject to a

special (privileged) tax regime.

The privileged regime does not

apply to banks, non-bank financial

organizations, investment funds,

insurance companies, microfinance

organizations; professional stock

market participants, residents of the

High Technologies Park, the special

recreational park “Avgustovsky chan-

nel”, the China-Belarus Industrial

Park, and ordinary business entities,

which carry out: real estate broker

activity, gambling activity, lottery

activity, activity in electronic interac-

tive games, production and sale of

excisable goods, jewelry, production

of securities, banknotes, coins,

stamps; activities within ordinary

partnership.

Peculiarities of taxation and

benefits for business entities regis-

tered in the countryside.

Business entities are within 7

years exempt from:

§ profit tax, income tax with

regard to realization of goods of its

own production;

§ – payment of state duties for

issuance of special permits (licenses);

§ – other taxes and duties

(except VAT, excises, stamp, off-shore

and government duties, patent tax,

utilization fee, custom fees and

duties, land tax, natural resource tax

(ecological tax), and taxes that are

calculated, withheld and paid in

acting as tax agent);

§ compulsory sale of foreign

currency, received under the deals

with non-residents of the Republic of

Belarus from realization of the goods

(works, services) of own production,

including income from lease of

property.

Specifics of taxation and other

benefits for business entities, which

branches are established in the terri-

tory of countryside:

Business entities are exempt

within 7 years from:

§ profit tax, with regard to the

profit of its branches;

§ property tax from the value of

objects which stay on the balance of

the branch established in a country-

side;

§ payments into the innovative

fund, calculated from the cost of the

goods (works, services), produced in a

countryside;

§ compulsory sale of foreign

currency, received under the deals

with non-residents of the Republic of

Belarus from realization of the goods

(works, services) of own production,

produced by the branch office.

Branch offices (affiliated

companies) of the business entities

which are entitled to use tax benefits

shall be located outside the locality

of the legal address of:

§ business entity itself;

§ company which was affiliated

to the business entity whose branch

office applies for benefits;

§ company whose restructuring

resulted in establishment of another

company whose branch office applies

for benefits.

In case branch offices (affiliated

companies) are located in a locality

as specified above, they will lose their

right to tax benefits.



Beneficial taxation does not

apply to:

§ individual entrepreneurs who

pay single tax;

§ organizations which produce

agricultural goods and pay single tax

as producers of agricultural goods

(except for companies which apply

this tax only with regard to their

branch offices and other affiliated

companies carrying out the com-

pany's tax obligations);

§ business entities which use

the simplified tax system;

§ organizations which provide

services in the field of rural tourism

and pay the duty for rendering

services in the field of rural tourism;

§ organizations which apply

other special tax regimes established

by law.

Additional advantages are ex-

emption from import customs duties

on some goods imported by business

entities as founders' non-monetary

contribution to the authorized fund.

9.5.4.Single tax from individual

entrepreneurs and other individuals

Payers of the single tax from

individual entrepreneurs and other

individuals are individual entrepre-

neurs and individuals not involved in

entrepreneurial activities.

The payers are exempt from the

following taxes:

§ income tax on individuals'

income earned by them in carrying

out activities, which are the subject

to the single tax;

§ value added tax levied on the

amount of the realization of goods

(works, services), property rights on


Belarus;

§ ecological tax;

§ tax for extraction (removal) of

natural resources;

§ local taxes and fees being

paid for the activities, which are the

subject to the single tax.

Payment of the single tax is

mandatory for individual entrepre-

neurs and individuals performing

types of activities as listed below

with regard to customers (private

individuals purchasing goods/works/

services exclusively for private, do-

mestic, family and other needs). The

tax base of a single tax is determined

by single tax payers on the basis of

ongoing activities and/or the number

of retail facilities, trade places, public

catering facilities, gross revenues

and the duration of reporting period.

Activities for which individuals,

which do not conduct entrepreneur-

ial activity, pay a single tax are the

following: services for growing agri-

cultural products; providing services

for crushing grain; livestock grazing;

tutoring; household cleaning; caring

for children and adults; services per-

formed by domestic workers: wash-

ing and ironing of bed linen and

other things; walking pets and care

for them; buying food; cooking; wash-

ing dishes; the payment from the

person served for the use of living

quarters and utilities; weddings

music and entertaining services;

anniversaries and other celebrations

service; the activities of actors, danc-

ers, standup actors, individual musi-

cians; master of ceremonies services;

photography, production of photo-

graphs; activity involving congratu-

lation on different holidays; sale of

kittens and puppies on condition of

keeping a pet (cat, dog); keeping

services, care and training of domes-

tic animals except for farm animals;

providing services for copying and

preparation of the documents and

other specialized office activities;

translation and interpretation ser-

vices; provision of services provided

by means of automatic devices for

measuring the weight, growth; repair

of apparel, knitwear, furs and

headwear, except for repair of carpets

and carpeting; realization of the

paintings, graphics, sculpture, folk

crafts (handicrafts), made by these

private individuals, flowers, orna-

mental plants, their seeds and

sprouts, animals (except kittens and

puppets) on the trading places

and/or on the other places stated by

the local executives and regulatory

authorities.

The list of activities for which

individual entrepreneurs pay the

single tax is broader and includes all

abovementioned types of activities

as well as food and nonfoods retail

trade (without limitation of square of

selling space (place) and it's number),

catering and provision of other ser-

vices to consumers.

The tax period of the single tax

is a calendar year.

The reporting period of the

single tax is a calendar month, when

the activities are performed.

The single tax is paid by individ-

ual entrepreneurs generally – at the

place of tax registration each month

no later than the 1th of the month of

activities; by individuals not engaged

in business activities – at the place of

tax registration or at the place of sale

of goods (works, services) before the

sale of goods (works, services).

The basic single tax rate for the

reporting month is set in a fixed

amount in Belarusian rubles, de-

pending on the type and location of

the activity, and makes between 8

Belarusian rubles to 1,260 Belarusian

rubles.

If the gross profit exceeds the

fortyfold amount of the single tax

during the corresponding reported

period, the individual entrepreneurs

calculated the additional assessment

of five (5) percent of the amount of

such excess.

9.5.5. Single tax for producers

of agricultural products

The single tax for producers of

agricultural products is set at a rate

of 1 % of gross proceeds. A term "pro-

ducers of agricultural products" in-

cludes organizations and their

branches, who gain not less than 50%

of their proceeds from selling the

products of plant growing (except

floriculture, growing of decorative

plants), primary treatment of flax,

apiculture, animal husbandry and fish

breeding.

Payment of the single tax re-

places payments of all taxes (duties)

and rental fee for land plots except

for the following taxes:

§ excises;

§ VAT;

§ tax, charges (duties) on goods


imported (exported) into the territory

of the Republic of Belarus;

§ state dues;

§ patent fees;

§ consular fees;

§ offshore duty;

§ stamp duty;

§ profit tax regarding the

dividends and equal profits; profits of

the members during the liquidation

of organization, withdrawal of the

member from the membership,

exceeded his capital contribution or

the actual expenses of the member

on the share purchase of the share

capital and some others types of

profit;

§ mandatory insurance fees;

§ mineral extraction tax;

§ utilization fee, and some other

taxes.

The tax period is one calendar

year. The reporting period of the

single tax can be a calendar month or

a calendar quarter depending on the

VAT payment scheme.

9.5.6. Single tax on imputed

income

Payers of the single tax on im-

puted income are those legal entities

of the Republic of Belarus which carry

out activities on providing services

for maintenance and/or repairing of

vehicles and their components, and

have the number of employees no

more than 15 people.

The object of taxation is the

income from providing services on

maintenance and repair. The tax rate

is set at 5%.

The income from providing

services on maintenance and repair is

the margin between the sum of im-

puted income and the revenue from

providing services on maintenance

and repair in the amount higher than

imputed income.

Imputed income for each month

is calculated as the product of the

basic profitability per employee and

the average number of employees in

the organization. Basic profitability

per employee per month is 3,410 of

Belarusian rubles. Regional (Minsk

city) councils of deputies have the

right to increase (decrease) this rate,

but not more than twice (half).

The tax period of the single tax

is a calendar month.

The period for filling the tax

return is not later than on the 20th of

the month, following the expired tax

period. Payment of tax – no later than

the 22th of the month following the

expired tax period.

9.6. Taxation of individualsIndividuals who are not in-

volved into entrepreneurial activities

pay the following taxes in Belarus:

– income tax on individuals;

– land tax;

– real estate tax.

The primary tax is income tax. It

is paid on incomes from labour activ-

ity, works (services) provided under

civil law contracts; royalties; on in-

comes in the form of interest pay-

ments and dividends; on incomes

from the alienation of real estate,

securities, shares of company stock;

and on other incomes.

Calculation of the income tax is

carried out according to a flat rate.

The rate of 16 % applies to in-

come of Belarusian individual entre-

preneurs, notaries and advocates

which operate individually.

Also the rate of 16% applies to

profits imputed by the tax authorities

on the basis of amount of excess of

expenditures over incomes.

The rate of 9 % is used for the

following incomes:

§ income received by individu-

als (with the exception of workers

who service and guard buildings and

territories) working for residents of

the High Tech Park under labour

contracts;

§ individual entrepreneurs that

are residents of the High

Technologies Park;

§ individuals working under

labour contracts within the frame-

works of a business project in the

field of innovative technologies

initiated by non-residents of the High

Technologies Park;

§ income received by individu-

als for their work under labour

contracts from a joint company

and/or residents of the China-

Belarusian Industrial Park before

January, 1 of 2027.

The rate of the income tax of 4%

is applied to the incomes in the forms

of gains (returned non-triggering

bets) received from the gambling

organizers.

In all other cases the tax is cal-

culated at the rate of 13 %.

9.7. Agreements on avoidance

of double taxationIn order to avoid double taxa-

tion the Republic of Belarus signed a

vast number of bilateral agreements

with other states. Currently there are

68 such agreements with different

countries (including Austria, Armenia,

Azerbaijan, Bahrain, Bangladesh,

Belgium, Bulgaria, Great Britain,

Hungary, Venezuela, Vietnam,

Georgia, Denmark, Egypt, Israel, India,

Iran, Ireland, Spain, Italy, Kazakhstan,

Qatar, Cyprus, China, Democratic

People's Republic of Korea, Kuwait,

Kyrgyzstan, Laos, Latvia, Lebanon,

Libya (has not come into effect),

Lithuania, Macedonia, Malaysia,

Moldova, Mongolia, Netherlands,

United Arab Emirates, Oman,

Pakistan, Poland, Romania, Russia,

Saudi Arabia, Singapore, Slovakia,

Slovenia, Syria, USA, Tajikistan,

Thailand , Turkey, Turkmenistan,

Uzbekistan, Ukraine, Finland, France,

Germany, Croatia, Switzerland,

Sweden, Sri Lanka, Czech Republic,

Estonia, Serbia, South Africa, Japan).

Doing Business in Belarus 2017 69 Tax System of the Republic of Belarus


9.7.1. Rates of tax on profits in the form of dividends in agreements

on avoidance of double taxation

Types of international

agreements on avoidance of

double taxation

States Tax ratesConditions of tax rates

application№

1

Tax is paid only in the state that is

a location of a dividend

beneficiary.

Great Britain*

2

Rate of tax levied in the state that

is a location of a payer of

dividends is differentiated

depending on many factors and

can be more or less than 12% rate,

provided for by the Belarusian

legislation.

Austria*

Belgium*

Hungary*

Venezuela*

Italy*

Korea*

Macedonia*

Finland*

Croatia*

Switzerland*

Serbia*

SAR*

up to 5%

up to 15%

With a not less than 25% share in the

authorized fund.

In all other cases.

Bangladesh*up to 10%

If company which has not less than 10% of the

company's capital which pays dividends is the

real owner

up to 12% In all other cases.

Armenia*up to 10% With a not less than 30% share in the authorized fund.


India*

Iran*

Pakistan*

Slovakia*

Turkey*

up to 10% With a not less than 25% share in the authorized fund.


Cyprus*

up to 5%

up to 10%


With a not less than 200 000 Euros

share in the authorized fund.

With a not less than 25% share in the authorized fund.

Netherlands*

up to 5%



With a share of not less than 50% with a cost of

not less than 250 000 Euros.

Only in state that is location of dividend beneficiary.

up to 10%


With a not less than 30% share in the authorized fund.Poland*

Germany*up to 5%

up to 15%

With a share of not less than 20% with a cost of

not less than 81 806.70 Euros.


Sweden*

With 100% share in the authorized fund, but only with

regard to profit, from which dividends are paid, that is

received from industrial or manufacturing activity, or rural,

forest and fish industry or tourism (including restaurants

and hotels). However, such exemption is not applied, when

profit, from which dividends are paid, is exempted from tax

in another state.


Only in state that is location of dividend beneficiary.


With 100% share in the authorized fund, but only with

regard to profit, from which dividends are paid, that is

received from industrial or manufacturing activity, or rural,

forest and fish industry or tourism (including restaurants

and hotels). However, such exemption is not applied, when

profit, from which dividends are paid, is exempted from tax

in another state.



up to 5%


With a not less than 25% share in the authorized fund.Czech Republic*

3


is the location of a dividends

payer, shall not exceed 5%.

Bahrain*

Qatar*

Kuwait*

Oman*

Saudi Arabia*

Slovenia*

Singapore

up to 5%

4



payer, shall not exceed 7.5%.

Lebanon* up to 7,5%

Bulgaria*Israel*China*DPRK*Latvia*

Lithuania*Mongolia*Romania*Thailand *

Czech Republic*Estonia*

5




up to 10%

Ireland*

Georgia*

up to 5%



Laos*up to 5%



UAE*up to 5%


With a not less than 100000 dollars

USA share in the authorized fund.

Sri Lanka*up to 7,5%





payer, shall not exceed 15%, that

is more than tax rate of 12%,

provided for by Belarusian

legislation.

6

Azerbaijan*

Vietnam*

Denmark

Egypt*

Kazakhstan*

Kirgizstan*

Malaysia

Moldova*

Russia

Syria*

Tajikistan*

Turkmenistan*

Uzbekistan*

Ukraine*

Japan*

up to 15%




7 Spain up to 18%

Tax is paid only in the state that is

the location of a dividends payer.

Ecuadorup to 5%


Where company directly owning at least 25% of

the dividend payer's capital is the real owner

Sweden*


9.7.2. Rates of tax on profits in the form of interests in agreements




double taxation


application№

1

Tax is paid only in the state of the

permanent location of an interests

beneficiary.

Great Britain

Denmark

Spain

2

up to 5%

up to 5%

Defined in

accordance with

the legislation of

the state of the

permanent

location of an

interests

beneficiary.


is location of payer of interests is

differentiated depending on many

factors and cannot be more than

10% provided for by Belarusian

legislation.

Switzerland*up to 8%

With any types of loans provided by bank.

In all other cases.

SAR*up to 5%

up to 10%

If an interests beneficiary is a bank or any

financial institution that is a resident of SAR.

In all other cases.

3

Rate of tax levied in the state

that is the location of an interests


Austria*Bahrain*Hungary*

Venezuela*Georgia*

Iran*Qatar*Cyprus*Kuwait*

Lebanon*Netherlands*

UAE*Oman*

Saudi Arabia*Slovenia*Finland*

Germany*Sweden*

Czech Republic*Ireland*

Singapore*




8Tax is paid only in the state that is

the location of a dividends payer.France up to 15%

The agreement hasn't entered into force

yet, but according to them

The rate of tax levied in the state that is a

location of a payer of dividends is

differentiated depending on many factors

and cannot be more or less than 12%

provided for by Belarusian legislation.

Libya*9


In all other cases.up to 15%

* Means that in order to apply for rules on place of payment and tax rate provided for by the corresponding agreement, a

dividends beneficiary should be a true owner of dividends.

Hong Kong up to 5%

Rate of tax levied in the country of

dividend payer's residence shall

not exceed 5%


* Means that in order to apply for rules on place of payment and tax rate provided for by the corresponding agreement, an

interests beneficiary should be a true owner of interests.

The agreement hasn't entered into

force yet, but according to them




9

Austria*Bahrain*Hungary*

Venezuela*Georgia*

Iran*Qatar*Cyprus*Kuwait*

Lebanon*Netherlands*

UAE*Oman*

Saudi Arabia*Slovenia*Finland*

Germany*Sweden*

Czech Republic*Ireland*

Singapore*

4




Serbia*

Italy*

Laos*

up to 8%

5



payer, shall not exceed 7,5%.

Bangladesh* up to 7,5%

6




Azerbaijan*

Armenia*

Belgium*

Bulgaria*

Vietnam*

Egypt*

Israel*

India*

Kazakhstan*

China*

DPRK*

Korea*

Kyrgyzstan*

Latvia*

Lithuania*

Macedonia*

Moldova*

Mongolia*

Pakistan*

Poland*

Russia*

Romania*

Slovakia*

Syria*

Sri Lanka*

Tajikistan*

Thailand*

Turkmenistan*

Turkey*

Uzbekistan*

Ukraine*

Croatia*

Estonia*

Ecuador*

Japan*

up to 10%

7




Malaysia* up to 15%

8

Tax is paid only in the state that

is the location of an interests

payer.

France up to 10%

Except for interests on bank credits and loans

and interests on commercial loans, that are

taxed in the state that is the location of an

interests beneficiary with tax rates provided for

in this state.

Libya* up to 5%

Ecuador* up to 5%



that is the location of a payer

of royalty is differentiated

depending on many factors

and cannot be more than 15%

rate, provided for by

Belarusian legislation.

2



double taxation


application№

1

Tax is paid only in the state

that is the location of a

royalty beneficiary.

Great Britain*

Denmark (P)

Poland*

France (PEC)

USA (PEC)

Malaysia*

When using or granting a right of usage of any patent,

trademark, blueprint or model, plan, secret formulae or

process, or copyright on science product, or for usage

or granting a right of usage of industrial, trade or

science equipment, or for information on industrial,

trade or science experience.

up to 10%

When using or granting a right of usage of

cinematographic films or tapes for radio broadcasting

and television, any copyright on a product of literature

or art.

up to 15%



of royalty cannot be more

than 5%.

3

Austria*

Bahrain*

Belgium*(S)

Hungary*

Georgia*

Iran*

Qatar*

Cyprus*

Korea*

Laos*

Lebanon*

Ireland*

Slovenia*

Singapore*

Finland*

up to 5%

Spain* up to 5%

Exception: profits from usage or granting a right of

usage of copyrights on literature, dramaturgic and

musical products (except for profits from video films

and any means of play of image or sound, used for

radio broadcasting or television), are levied by tax only

in the state of the location of a royalty beneficiary.

Germany*

up to 3%

up to 5%

When using or granting a right of usage of copyright

on a product of science, patent, trademark, design or

model, plan, secret formulae or process, or for

information on industrial, trade or science experience.

When using or granting a right of usage of copyright

on products of literature or art, including video films

and films or tapes for radio broadcasting and

television, or for usage of any types of equipment and

vehicles.




than 6%.

4 Italy* up to 6%

9.7.3. Rates of tax on profits in the form of royalty in agreements



Up to 5%

When using or granting a right on usage of any

copyright on a product of science, any software,

trademark or for usage or granting a right on usage of

all types of equipment and vehicles.

Up to 10% In all other cases.

Venezuela*




than 10%.

5

Azerbaijan*(CP)

Armenia*

Bangladesh*

Bulgaria*

China*

DPRK*

Kuwait*

Latvia*

Lithuania*

Macedonia*

Mongolia*

Oman*(S)

Russia*

Turkey*

Croatia*(S)

Czech Republic*

Estonia*

Serbia*

Saudi Arabia*

Sri Lanka*

Ecuador*

up to 10%




than 6%.

up to 5%

When granting or using any copyright on a product of

literature, science and art (except for video films) or

when using or granting a right on usage of industrial,

commercial or scientific equipment or vehicles.Israel*


Netherlands*

up to 3%



process, or copyright on science product, or for


up to 5%

When using or granting a right of usage of any

industrial, trade or science equipment, including road

vehicles.

up to 10%



and television, any copyright on a product of literature,

science or art.

UAE*

up to 5%


copyright on products of science, any patent,


process, or for usage or granting a right of usage of

industrial, trade or science equipment, or for


up to 10%




or art.

When granting a right of usage of any copyright on

products of literature, science and art, including video

films or films or tapes and other means of image or

sound transition.





or art.

Slovakia*

up to 5%

When granting a right of usage of any copyright on

products of literature, science and art, including video

films or films or tapes and other means of image or

sound transition.

up to 10%



process, or for information on industrial, trade or

science experience or vehicles.

Switzerland*

up to 3%


secret formulae or process, or for information on

industrial, trade or science experience.

up to 5%

up to 10%


industrial, trade or science equipment, including

vehicles.

In all other cases.

Sweden*

up to 3%


secret formulae or process, or for information on


up to 5%

up to 10%


industrial, trade or science equipment.

In all other cases.

SAR*up to 5%


industrial, trade or science equipment, including

vehicles.


Japan*

only in

state of

location of

royalty

beneficiary.


copyright on products of literature, art or science,

including cinematographic films and films or tapes for

radio broadcasting or television.

up to 10%



process, or for granting a right of usage of industrial,

trade or science equipment, or for information on





than 15%.

6 Vietnam*Egypt*India*

Kazakhstan*China*

Kirgizstan*(CP)Moldova*Pakistan*Romania*Tajikistan*Thailand*

Turkmenistan*(CP)

Uzbekistan*(CP)Ukraine*

up to 15%




than 18%.

7 Syria* up to 18%




that is the location of an

interests payer, shall not exceed

5%.





that is the location of an

interests payer, shall not exceed

5%.

8 Libya* up to 5%

* Means that in order to apply for rules on place of payment and tax rate provided for by the corresponding agreement, a royalty beneficiary

should be a true owner of royalty.

Used abbreviations: P – program; PEC – program for electronic computer; S – software; CP – computer program.

Each treaty uses different nomenclature: “royalty” is defined as remuneration for use of various objects (rights), which have or do not have

direct relations to intellectual property. Thus, using information stated in the table, please, check the possibility to use benefits, stipulated by

specific international treaty.

Hong Kongup to 3%


Where any aircraft are used or chartered.

Territorieswith speciallegal status

10

79Doing Business in Belarus 2017 Territories with special legal status

Belarusian legislation defines

the following territories, which have

special legal status: free economic

zones, High Tech Park and the China-

Belarus Industrial Park.

10.1. Free economic zones

(FEZ)Free economic zone – is a part of


Belarus with strict borders within

which the special legal regime for

carrying out investment and business

activity is stipulated for the residents

of free economic zone.

Currently in Belarus there are

six free economic zones (hereinafter

– FEZ): FEZ Minsk, FEZ Brest, FEZ

Gomel-Raton, FEZ Mogilev, FEZ

Grodnoinvest, FEZ Vitebsk. As from

January 1, 2017 the borders of FEZ

Brest and FEZ Vitebsk have been

extended.

Also, as from January 1, 2017 the

unified expiration term of Belarusian

FEZs has been established:

December 31, 2049.

10.1.1. Joining FEZ

The resident of the of FEZ is a

business entity of the Republic of

Belarus or individual entrepreneur,

registered by the Administration of

FEZ as a resident of FZ in accordance

with the procedure defined by the

legislation on FEZ.

To obtain the status of a resi-

dent of a free economic zone organi-

zation or entrepreneur should com-

ply with all the following require-

ments:

§ location in the territory of

FEZ;

§ conclusion of Business

Environment Agreement with the

Administration of FEZ, concerning

the terms of activities within FEZ;

§ volume of investments not

less than 1,000,000 Euro or not less

than 500,000 Euro where invest-

ments would have been made within

3 years as of the date of conclusion of

the agreement on FEZ activities

terms;

§ creation and/or development

of manufacture aimed at export

and/or import-substitution.

The resident of FEZ carries out

its activity pursuit to the legislation

and Business Environment

Agreement within FEZ.


Agreement within FEZ is executed

between the business entity or indi-

vidual entrepreneur and the

Administration of FEZ.

The Business Environment

Agreement within FEZ is executed

on the term of project realization. The

approximate form of the Business

Environment Agreement within FEZ

is approved by the Administration of

the relevant FEZ.

10.1.2. Taxation of FEZ

residents

Taxation in free economic zones

is characterized by a number of privi-

leges and benefits (exemption from

payments of some duties, other pay-

ments, and/or reduced tax rates).

Tax privileges for FEZ residents

are not applied to banks and insur-

ance organizations, public catering,

gambling activity, activity in elec-

tronic interactive games, stock opera-

tions; selling of goods (works, ser-

vices), production (performance,

rendering) of which are totally or

partly produced with the help of fixed

assets, which are owned by the FEZ

resident and/or by the FEZ resident

employees outside the FEZ territory.

The benefits of this regime are

applied to FEZ residents regarding

their realization of:

§ own-produced export goods

(works, services) under foreign trade

agreements concluded with non-

residents;

§ own-produced goods (works,

services) produced by the residents in

the territory of FEZ for other

residents of FEZ;

§ own-produced goods

produced by non-residents under

agreements concluded between a

FEZ resident and a foreign individual

or a legal entity on realization or

storage of goods and/or their

participation in exhibition fairs

conducted in the territory of foreign

countries.

Custom privileges:

A free custom zone can be

established in the territory of a FEZ.

The goods are located and used in

the territory of a free custom zone

without payment of import custom

duties, taxes, without fulfillment of

non-tariff regulatory measures with

regard to the foreign goods,

prohibitions and restrictions for


2014

02468101214

2015

0 2 4 6 8 10 12 14

11,0

9,2

12,0

9,4

11,4

8,5

12,7

10,1

The scopeof commercialmanufacture

Investmentsto the permanent

capital assets

Export of goods

Import of goods

Rate of FEZ residents in main macroeconomic indicators of

the Republic of Belarus in 2014-2015¹

Tax privileges and other benefits for FEZ residents:

№

1

Tax benefit Tax benefit terms and duration

Exemption from profit tax

FEZ residents

registered before

01.01.2012

registered after

31.12.2011

are fully exempt from profit tax for the

period from January 17, 2017 till

December 31, 2021

are fully exempt from profit tax within

10 years as from the date of gross profit

declaration

Profit tax rate reduced by

50% (but not more than

12%)

in other cases, i.e. upon the expiry of the above periods

2Exemption from real

estate tax*

within 3 years from the date of registration

as FEZ resident

upon the expiry of 3 years from the

date of registration as FEZ resident

with regard to facilities acquired in ownership

(constructed) in FEZ territory irrespective of

their purpose of use

with regard to facilities in FEZ territory

irrespective of their purpose of use,

provided goods (works, services) subject

to FEZ special regime have been realized

in the last preceding quarter

3 Exemption from land tax

for the period of engineering and construction

of facilities but not more than for 5 years from

the date of registration as FEZ resident

for the period from January 1,

2017 till December 31, 2021

with regard to land plots within FEZ territory

designed for real estate construction

with regard to land plots within FEZ

territory, provided goods (works, services)

subject to FEZ special regime have been

realized in the last preceding quarter

with regard to goods which are placed by FEZ residents under the customs release

procedure for domestic consumption and/or which have been produced with the

use of foreign goods placed under the FEZ customs procedure

4 Exemption from VAT

5

Exemption from rental

payments for state-owned

land plots on completing

construction

with regard to land plots located within the corresponding FEZ territories irrespective of

their purpose of use; therewith the mentioned benefit will be applied from the 1st day of the

1st month to the last day of the 3rd month of the quarter if within the last preceding quarter

the FEZ resident realized goods outside the territory of the Republic of Belarus or to other

FEZ residents. Before January 1, 2017 such benefit was applied only during the period of

engineering and construction of FEZ residents' facilities, but not more than for 5 years since

their registration as FEZ residents.

* For reference only: This benefit is not applied to real estate units which have been acquired or transferred by a FEZ resident for rent, lease

or other compensated or non-compensated use, as well as to buildings, premises and transfer devices of limit-exceeding incomplete

construction.

Additionally, in order to create favorable business conditions for free warehouses and to develop trading activities, as from January 1, 2017

to December 31, 2019 the owners of free custom zone warehouses will be exempt from VAT, which is normally collected during the release

of goods for domestic consumption after the customs procedure at a customs warehouse.

goods from the custom union.

However, as from January 1,

2017 in compliance with the

obligations of the Republic of Belarus

as EEU member, all FEZ residents

lost one of their main benefits which

was duty-free release into the

territory of the Custom Union of

goods manufactured in FEZs from

foreign materials imported free of

duties.

10.2. High Tech Park (HTP)The High Tech Park is a

favorable treatment provided by the

Republic of Belarus to companies

carrying out activities in the field of

the information technology. The HTP

was established in 2005 and its

ultimate goal is to increase competi-

tiveness of the national economy by

developing the sector of the

information and communication

technology. The effective period of

the HTP special treatment is set until

December 25, 2020.

10.2.1. Joining HTP

The HTP residents may be legal


registered in the Republic of Belarus.

Both Belarusian citizens and foreign

citizens and companies may act as

founders of such legal entities. As of

January 1, 2017, 164 companies are

Doing Business in Belarus 2017 80 Territories with special legal status

HTP residents and are engaged in

software development and rendering

IT services to clients from 66

countries all around the globe.


of Belarus specifies certain

requirements for applicants

intending to join the High Tech Park:

1) an applicant shall carry out

activities permitted by the legislation

in the HTP;

2) an applicant shall have a

business plan to implement as a HTP

resident.

The following documents shall

be submitted to the HTP

Administration in order to join the

High Tech Park:

1) an application;

2) copies of statutory docu-

ments and a state registration

certificate;

3) a business plan proposed for

implementation by a HTP resident.

A business plan is a key factor

for making a decision on registration

of an entity as a HTP resident. Such

business plan shall include the

information on a legal entity, its

history and achievements, a

development strategy with regard to

the High Tech Park, a description of

its major products planned to be

manufactured, as well as an analysis

of potential markets for sale thereof.

Moreover a business plan shall

contain an action plan for achieving

the objectives listed in the business

plan with well-defined time limits for

implementation of such actions.

A business plan shall contain a

calculation of main economic

indicators planned for the period of

its implementation, including

product costs, sales revenues, project

profitability, as well as sources and

amounts of its funding and areas for

reinvestment of profits received from

the project implemented and other

required information.

The HTP Administration

examines the submitted documents

and furnishes them to the

Supervisory Board along with its

opinion on advisability or inexpedi-

ency of the applicant's registration as


a HTP resident. As a rule, a final

decision on registration (a refusal to

register) is made within a month from

the submission of an application for

registration.

10.2.2. Types of activities

carried out by HTP residents

Types of activities which HTP

residents are entitled to carry out can

be divided into three groups (the

given classification is not official):

А. Specialized core types of

activities. In particular, they include:

§ analysis, design of and

software development for informa-

tion systems;

§ fundamental and applied

research, experimental development

in the field of natural and technical

sciences (R&D works connected with

the HTP activities, including the area

of development of the information

society) and implementation of R&D

results;

§ development or separate

stages of development (research,

designing (construction), testing,

technical tests) of materials,

technologies, devices and systems of

micro-, opto- and nanoelectronics,

microelectromechanics and

implementation of such develop-

ment results, as well as selling of

materials, technologies, devices and

systems of micro-, opto- and

nanoelectronics, microelectro-

mechanics developed by a HTP

resident and built-in software

compatible therewith;

§ development or separate

stages of development (research,

designing (construction), testing,

engineering tests) of technologies,

devices and systems of mechatronics,

built-in systems, software and

hardware tools, software and

hardware complexes, components

and computer equipment and

implementation of such develop-

ment results along with provision of

services to put them into production

or without provision of these

services.

B. Specialized ancillary types of

activities. The legislation specifies, in

particular:

§ consulting of companies on

issues regarding business activities

and management in order to increase

the efficiency thereof, along with

provision of services associated with

complex control of development and

implementation of integrated

information systems and technolo-

gies;

§ performance of certain works

(work stages) involved in the

software development process

(software tool development process),

support, maintenance of users'

software (software tools) or own

software (software tools);

§ audit of data systems and

software in the process of develop-

ment, implementation and operation

thereof as for compliance with

technical requirements and/or users'

informational needs under orders of


entrepreneurs of the Republic of

Belarus.

C. Non-core permitted types of

activities:

§ leasing of immovable

property (a part thereof) owned by a

HTP resident located in the HPT

territory;

§ granting of a loan to employ-

ees for construction (reconstruction)

or acquisition of residential premises

funded out of the profits.

This division into the above

groups is significant as the

legislation on the High Tech Park sets

forth limitations on HTP residents

carrying out types of activities listed

in groups B and C.

The HTP resident is not entitled

to carry out other types of activities.

Any breach of this prohibition entails

the deprivation of the HTP resident

status and a loss of rights to all

benefits.

10.2.3. Taxation of HTP

residents

There are the following tax

concessions provided for HTP

residents:

1. Exemption from:

§ a profit tax (except for a profit

tax payable by a tax agent);

§ a value added tax on turn-

Territories with special legal status


overs from selling of goods (works,

services, property rights);

§ a value added tax on import of

manufacturing equipment, compo-

nents and/or spare parts thereof into


§ a land tax on land plots within

the High Tech Park for a period of

construction of permanent structures

(buildings and constructions) on such

land plots by HTP residents in order

to carry out the activities, but no more

than for 3 years;

§ a real estate tax on real estate

objects of HTP residents located in

the HTP territory (except for the ones

granted for lease);

§ – an offshore duty imposed on

the payment (transfer) of dividends

to its founders (participants).

2. compulsory insurance

contributions are not charged on the

portion of an HTP resident

employee's income which exceeds

one average monthly salary in the

Republic of Belarus received in a

month preceding the month for

which the compulsory insurance

contributions shall be paid. Thus, the

compulsory insurance contributions

will be calculated and paid to the

Social Protection Fund according to

the amount of one average salary in

the Republic of Belarus irrespective

of the employee's actual salary,

consequently the amount of

compulsory insurance contributions

will not depend on the salaries of the

HTP residents' employees and it will

not be increased with the salary

increase of such employee, which

results in money saving by HTP

residents.

3. there is a 9% rate of an

income tax applied to the income of

individuals received within a

calendar year from HTP residents

under employment contracts, as well

as to the income of HTP residents

which are individual entrepreneurs,

unlike the general rate of income tax

applied to private individuals which

equals to 13%.

4. there is a reduced 5 % rate of

an income tax applied to the income

received from HTP residents by

foreign companies not carrying out

activities in the territory of Belarus

through a permanent representative

office in respect of dividends, debt

securities, royalty.

Customs privileges: exemption

from customs duties and VAT when

importing goods into the Republic of

Belarus in order to carry out types of

activities to implement investment

projects by HTP residents. To apply

this privilege one needs to obtain a

resolution of the HTP Administration

on intended use of such goods.

Other benefits: foreign currency

received by the HTP residents from

selling of goods (works, services,

property rights) is not subject to

compulsory selling while carrying

out the above types of activities.

10.3. Taxation of the

Industrial Park “Great Stone”The Industrial Park "Great

Stone" (hereinafter – the “Park”) was

created by Edict of the President of

the Republic of Belarus N 253 June 5,

2012.

The Park, a special economic

area, is located in the territory of

9150, 1 hectares at a distance of 25

km from Minsk in proximity to the

National Airport and has a specific

legal status on assignment of tax,

customs and other privileges. In the

territory of the Park general infra-

structure for its residents is being

built (production and dwelling areas,

office complexes and shopping

arcades, financial and research and

development centres).

The Park is created for the

purposes of attracting domestic and

foreign investment for:

§ organization and develop-

ment of high-tech and competitive

works in the spheres of electronics,

fine chemistry, biotechnology,

engineering industry and new

materials;

§ performing research and,

development and technological work

in these spheres (hereinafter - the

R&D);

§ development of logistics

10.3.1. Joining Industrial Park

“Great Stone”

Park residents are legal entities

which simultaneously meet the

following requirements:

1. an investment project presup-

poses carrying out business activity

in the Park territory according to the

main activities of the Park;

2. declared investment volume for

investment project implementation

equals to no less than USD 5 mln.,

and for the carrying out of R & D

project not less than USD 1 mln.

In order business entities to be

registered as the residents of the Park

they submit to the Administration of

the Park the following:

1. application form, stipulated by

the Head of the Administration of the

Industrial Park, shall contain

information on investment project,

type (types) of business activity

planned to be developed in the

territory of the Industrial Park,

investments amount and terms;

2. originals and copies of

constituent documents verified by

the legal body Executive;

3. original and copy of certificate

of the legal body registration verified

by the Executive;

4. investment project basis in free

format, containing investment plan;

types of business activity to be

carried out; peculiar methods to

create and develop high-quality

production; types and production

output of goods (works, services);

statement for their production need;

anticipation profit from project

implementation; other technical-

and-economic parameters.

10.3.2. Taxation of the

residents of Industrial Park “Great

Stone”

1. Park residents are absolved

from the following taxes for a period

of 10 years after the date of their

registration:

§ Profit tax as to profit from

realization of domestic manufacture

goods (works, services), which have

been produced in the Park;

§ Real estate tax on the objects

located at the Park territory regard-

Territories with special legal status

Doing Business in Belarus 2017 83 Territories with special legal status

less of the purpose of their use;

§ Land tax from land plots in the

Park territory.

2. After 10 calendar years (from

the 11th year from the date of

registration as the resident and until

the 20th year of being the Park

resident) the taxation is carried out at

the standard tax rate reduced to 50%.

3. Goods (processing equip-

ment, accessories and spare parts for

this equipment, raw materials and

supplies), which are imported solely

in the purposes of implementation of

investment projects within the Park,

are exempt from import customs

duties (raw materials and supplies –

on condition that they are not

produced (are underproduced ) in the

States parties of Customs Union or if

produced raw materials (supplies) do

not comply with the technical

characteristics) and VAT.

4. The dividends set by the Park

residents to their shareholders,

within 5 calendar year from the date

of gross profit receipt, are the subject

to the beneficial zero profit tax rate

(profit tax rate for foreign business

entities, which do not carry out their

business activities in Belarus through

the representation office).

5. Prior to 2027 the tax rate on

income of foreign organizations,

which do not operate through a


Belarus, of royalties accrued by Park

residents to foreign organizations,

which do not operate through a


Belarus in the form of rewards for

information concerning industrial,

commercial or scientific experience

(including know-how), license fees,

patents, drawings, utility model,

scheme, formula, design or process, is

5 percent.

6. Up to 2027 income of

individuals, earned under labour

contracts, are taxable at a rate of 9 %

(instead of a standard rate of 13 %).

7. Mandatory insurance

contributions are not assessed to the

part of the income of the employees

of the Park's resident if it exceeds the

employees' average wages in the

Republic for the month preceding the

one for which mandatory insurance

contributions must be paid (general

limit rule is five times the average

wages)

8. Park residents and their

foreign workers are exempt from

mandatory insurance contributions

from the payments charged in their

favour.

9. Park residents are completely

exempt from VAT paid when

acquiring (importation into Belarus)

goods (works, services), proprietary

rights used for designing, construc-

tion and equipping of buildings and

structures located in the territory of

the Park.

Other preferences and benefits:

1. Park residents are exempt

from compulsory sale proceeds in

foreign currency on the domestic

market of the Republic of Belarus

before January up to 2027.

2. In the territory of the Park a

simplified procedure of designing

and construction of structures by

foreign standards and rules is in

effect, as well as parallel designing

and construction of structures is

acceptable.

3. Park residents are exempt

from compensation for loss of

agricultural and (or) forestry

production, as well as from compen-

sation planting and compensation

payments for removed, replanted

objects of the plant world, compensa-

tion payments for harmful effects on

the objects of the animal world and

their habitat.

4. The Park residents and the

residents of Belarus are allowed to

use foreign currency, securities in

foreign currency and (or) payment

documents in foreign currency while

conducting currency transactions

aimed at the development of urban

projects of the Park and the construc-

tion of its objects.

5. The Park residents do not pay

state fees for issuance, renewal of

permits for involvement of foreign

workers into the Republic of Belarus,

special permits for work in the

Republic of Belarus of foreign

citizens and stateless persons, and

the mentioned citizens are exempt

from payment of the fee for issuing

temporary residence permits in the


6. Establishment of new taxes,

fees and charges does not lead to

accrual of obligation of Park

residents to pay that taxes, fees and

charges on activities exercised in the

territory of the Park.

7. The Park residents and their

employees which are foreign citizens

temporarily residing (staying) in the

Republic of Belarus and mobilized for

implementation of investment

projects in the Park territory, are

exempt from the mandatory

insurance premiums from payments

to their advantage.

Foreign investors and partici-

pants of construction - non-residents

of the Republic of Belarus shall be

guaranteed after payment of taxes

and other obligatory payments to a

free transfer from the Republic of

Belarus of profits obtained in the

territory of the Republic of Belarus as

a result of investment activities in

the Park.

Monopolistic Activityand Illicit

Competition11

85Doing Business in Belarus 2017Monopolistic Activity

and Illicit Competition

11.1. Monopolistic Activity:

General InformationIn 2017 monopolistic activity is

mainly regulated by Law of the

Republic of Belarus as of December

12, 2013 No. 94-Z “On counteraction

to monopolistic activity and on

development of competition”

(hereinafter referred to as Law No.

94-Z) and by Law of the Republic of

Belarus as of December 16, 2002 No.

162-Z “On natural monopolies”

(hereinafter referred to as Law No.

162-Z).

Monopolistic activity is defined

as actions (inaction) of business

entities, state bodies aimed at non-

admission, limitation or elimination

of competition.

In the Republic of Belarus

existence of a state monopoly is

permitted. A state monopoly is the

system of social relations in which

the exclusive right to perform certain

activities, including business, is

owned by the state represented by

certain state bodies or other

authorized entities.

A legal status of natural

monopolies is regulated by a

separate legal act. Law No. 162-Z

indicates the following types of

activities as natural monopolies in

Belarus:

§ transportation of petrol and

oil products through main pipelines;

§ transportation of gas through

main and distribution pipelines;

§ transfer and distribution of

electric and thermal energy;

§ centralized water supply and

water disposal;

§ telecommunications and

public postal services;

§ railroad services, rendered

using railroad infrastructure, railroad

transportations;

§ services of transport termi-

nals and airports;

§ air navigation services.

The antimonopoly policy is

implemented in the Republic of

Belarus by the antimonopoly body –

the Ministry of Antimonopoly

Regulation and Trade of the Republic

of Belarus and its structural subdivi-

sion – main departments of the

Ministry of Antimonopoly Regulation

and Trade of regions and Minsk city.

Antimonopoly control in

Belarus includes the following types

of activities:

§ control over creation and

reorganization of holding companies,

unions, associations and other

alliances of business entities;

§ control over transactions with

stocks, shares in statutory funds of

business entities as well as acquiring

rights of participation in the

management bodies of business

entities;

§ control over creation and

reorganization of commercial

organizations through mergers and

acquisitions;

§ control over reorganization of

business entities with the dominant

position through transformation

thereof into joint stock companies.

§ control over agreements and

coordinated activities of business

entities;

§ control over activities of

business entities with dominant

position.

11.1.1. Antimonopoly control

over creation of holding companies

Creation and reorganization of

holding companies are regulated by

Edict of the President of the Republic

of Belarus No. 660 “On some issues

related to creation and activities of

holding companies”. In accordance

with the Edict before submission of

documents to register a holding

company (to change its participants)

a management company of such

holding (an owner or an authorized

representative) must obtain an

approval of the antimonopoly body

for creation of such holding if such

approval is required by Law No. 94-Z.

Such approval is required if the

balance sheet value of the assets

owned by one of the founders of

created associations of economic

entities identified on the basis of the

financial statements on the latest

reporting date exceeds one hundred

thousand basic units or total

revenues generated by one of the

founders of associations of economic

entities from the sale of goods in the

reporting year preceding the year of

creation exceed two hundred

thousand basic units or if one of

these entities is included in the State

Register of economic entities with

the dominant position in the

commodity markets or in the State

Register of natural monopolies.

The antimonopoly body is

entitled to:

§ either approve creation

(reorganization) of a holding

company,

§ or make a reasonable decision

declining the approval, if creation

(reorganization) of a holding

company may lead to appearance or

strengthening of a dominating

position in a commodity market

and/or limitation of competition, as

well as if during the application

process the antimonopoly body

discovers the fact that the informa-

tion submitted is inaccurate and/or

incomplete.

The antimonopoly body may

approve creation of the holding

company even if economic entities

establish or strengthen their

dominant position in the commodity

market and (or) if competition is

excluded, limited or eliminated. To do

so the economic entities have to

prove that their actions have or may

have the following effect:

§ they improve production

(sale) of goods or stimulate a

technical (economic) progress or

increase the competitiveness of

goods manufactured in the Republic

of Belarus in the global commodity

market;

§ consumers receive a propor-

tionate part of advantages (benefits)

acquired by the entities as a result of

such actions.

The approval or the reasonable

refusal shall be made within 30 days

from the receipt of an application and

such approval or reasonable refusal

is deemed to be valid for 1 year after

it is issued.

11.1.2. Antimonopoly control

over transactions with stocks

(shares)

The approval of the

antimonopoly body for a transaction

is required, if the balance sheet value

of assets owned by such legal entity,

stocks (shares in the authorized fund)

of which and (or) rights to which are

acquired, exceeds one hundred

thousand basic units on the latest

reporting date or total revenues

generated from the sale of goods

exceed two hundred thousand basic

units based on the results of a fiscal

year preceding the year of such

acquisition.

Apart from the financial

criterion, the approval of the

antimonopoly body is conditioned by

making a transaction, the result of

which becomes:

1) acquisition of the rights to

dispose of a package:

§ of more than 25% of stocks

(shares) if a purchaser was not a

participant of an economic entity

before or had a package of 25% or

less;

§ of more than 50% of stocks

(shares), if previously a purchaser had

a package of 25-50% of stocks

(shares) in the authorized fund of a

subject of transaction.

2) acquisition of stocks (shares

in the authorized fund) of other

business entity in a particular

commodity market by a business

entity with a dominant position in the

same commodity market.

3) acquisition by a business

entity of 25% or more stocks (shares

in the authorized fund) of a business

entity with a dominant position in the

commodity market, as well as other

transactions enabling such economic

entity to have influence on a

decision-making process with regard

to an economic entity having the

dominant position on a commodity

market.

The antimonopoly body makes

the decision within 30 days. As in the

case of registration of a holding

company such decision may be either

positive or negative. Negative one is

issued if a transaction results or may

result in appearance or strengthen-

ing of a dominant position of a

business entity in a commodity

market and/or limitation of competi-

tion.

The antimonopoly body may

approve transactions with stocks

(shares) even when they entail

strengthening of a dominant position

in the commodity market if such

transactions have or may have the

following effect:

§ they improve production

(sale) of goods or stimulate a

technical (economic) progress or

increase the competitiveness of

goods manufactured in the Republic

of Belarus in the global commodity

market;




such actions.

11.1.3. Non-compliance with

the obligation to obtain the approval

Civil law consequences

A transaction made in breach of

the Law and resulting in appearance

or strengthening of a dominant

position of a business entity in a

commodity market and/or in

limitation of competition may be

invalidated by a legal action of the

antimonopoly body or any interested

party in court.

Non-compliance with this

obligation itself will not cause

invalidation. The essential condition

is the fact that a transaction has

resulted in appearance or strength-

ening of a dominant position of a

business entity in a commodity

market and/or in limitation of

competition. However this fact must

be proved in court.

Administrative liability

Administrative liability is

stipulated for an official of a legal

entity. Pursuant to Clause 1.3. of Edict

of the President of the Republic of

Belarus as of February 27, 2012 No.

114 “On some measures on enforce-

ment of state antimonopoly

regulation” (hereinafter referred to as

“Edict No. 114 ”) the liability is a fine

in the amount from twenty (two

hundred and eight Euro) to one

hundred basic units (one thousand

and thirty nine Euro).

Criminal liability

Non-compliance with the

requirement of the Law falls within

the scope of criminal liability if

within 1 year after an administrative

punishment an official of a legal

entity has committed the same

offense. Under Clause 244 of the

Criminal Code of the Republic of

Belarus the punishment for such a

crime is up to 2 years of imprison-

ment.

11.1.4. Anti-monopoly control

over agreements (coordinated

actions) of business entities

Antimonopoly legislation

prohibits agreements and coordi-

nated activities of business entities if

such agreements or activities lead to

non-admission, limitation or

elimination of competition, including

agreements and coordinated

activities between competitors

acting in the same commodity

market, which have or may have the

following result:

§ division of a commodity

market by territory;

§ exclusion or limitation of

access to the commodity market for

other business entities;

§ establishing, increasing,

decreasing or fixing prices (tariffs),

including different prices (tariffs) for

the same product;

§ increasing, decreasing or

fixing prices on tenders;

§ economically or technologi-

cally unreasonable reduction in and

(or) cessation of the production of

goods;

§ economically or technologi-

cally unreasonable refusal to execute

contracts with certain sellers or

consumers.

The antimonopoly law specifies

separate rules in respect of vertical

agreements which are agreements

between business entities which are

not competitors, one of which

acquires goods or is a potential

acquirer, and another one provides a

Doing Business in Belarus 2017 86Monopolistic Activity


product or is a potential seller.

Vertical agreements are

forbidden by the antimonopoly law:

§ if such agreements lead or

may lead to establishment of a resale

price of a product, except for fixing a

maximum resale price;

§ if such agreements provide

the obligation for the customer not to

sell goods of business entities

competing with the seller. This

prohibition does not apply to

agreements on the organization of

sale of goods by a consumer under a

trademark or other means of

identification of a seller or a

manufacturer.

Agreements and coordinated

activities may be considered as

acceptable by the antimonopoly

body, if they do not impose any

restrictions on other business

entities and do not create opportuni-

ties for the prevention, restriction or

elimination of competition in the

relevant commodity market and if

business entities prove one of the

following consequences:

§ improvement of production

(sale) of goods or stimulation of a

technical (economic) progress or the

increase in competitiveness of goods

manufactured in the Republic of

Belarus in the global commodity

market;




such actions.

Vertical agreements are

allowed:

§ if such agreements are

complex business license agree-

ments (franchising agreements);

§ if the share of each business

entity, that is a party to such an

agreement, in any commodity market

does not exceed 15%.

11.1.5. Consequences of

conclusion of anticompetitive

agreements and coordinated actions

Administrative liability

Administrative liability is

stipulated for both an official of a

legal entity and a legal entity itself

(or an individual entrepreneur).


Pursuant to Clause 1.4. of Edict No.

114 the liability for an official of a

legal entity is a fine in the amount

from twenty to one hundred basic

units. The liability for an individual

entrepreneur is a fine in the amount

from one hundred to two hundred

basic units. The liability for a legal

entity is a fine in the amount up to ten

percent of the proceeds from the sale

of goods (works, services) in the

market where the violation has

occurred, either for the calendar year

preceding the year in which such

administrative violation took place,

or for a part of the calendar year in

which such administrative offense

was detected and preceding the date

of detection of such an administra-

tive offense if an offender has not

been involved in the sale of the

goods (works, services) in the

preceding calendar year, but the fine

shall be at least four hundred basic

units.

11.1.6. Anti-monopoly control

over activities of business entities

with the dominant position

The dominant position of

business entities is determined in

accordance with the legislation of

the Republic of Belarus based on the

analysis of commodity markets,

conducted by competition authori-

ties of the Republic of Belarus. There

is the Instruction in the Republic of

Belarus on the procedure to

determine the dominant position of

business entities approved by

Resolution of the Ministry of

Economy as of 20.03.2015 No. 24,

which establishes the rules to

determine the dominant position of

business entities in particular

commodity markets. If the position of

a business entity in the market or of

several business entities is recog-

nized as a dominant position, the

volume of production and product

quality, price levels and other

indicators of activities of such

business entity (entities) fall under

special state control aimed to

prevent and restrain the fact of abuse

of such dominant position in the case

of its identification.

Business entities with the

dominant position must provide a

special form of statistical reports to

the antimonopoly authority.

The activities of companies

holding a dominant position in the

market of the Republic of Belarus are

controlled through audits conducted

by antitrust authorities.

State monitoring of the level of

prices (rates) for goods (works,

services) of economic entities with a

dominant position in the markets of

the Republic of Belarus is carried out

through setting whether flat or limit

prices (rates) or declaration of prices

(rates).

Clause 1.2. of Edict No. 114

provides liability for officials of a

legal entity in the amount up to one

hundred basic units for the cases

where business entities with a

dominant position commit acts of

abuse of their dominant position in

accordance with antimonopoly law,

for individual entrepreneurs – up to

two hundred basic units, for a legal

entity – up to ten percent of the sum

of revenues from sales of goods

(works, services) for the calendar year

preceding the year in which the

administrative offense has been

identified, or for a part of the calendar

year in which such administrative

offense was detected and preceding

the date of detection of such an

administrative offense if an offender

has not been involved in the sale of

the goods (works, services) in the

preceding calendar year, but the fine

shall be at least five hundred basic

units.

11.2. Unfair competitionThe Belarusian legislation

qualifies unfair competition as any

actions taken by a business entity or

by several business entities, which

aimed to gain advantages in business

activities, as well as violate the

antimonopoly law or honesty and

rationality principles and may inflict

or have inflicted losses on other

competitors or may damage their

goodwill.

The forms of unfair competition

Monopolistic Activity


Doing Business in Belarus 2017 88Monopolistic Activity


may include the following actions:

illegal using of a company name, a

trade mark (service trademark),

illegal copying of exterior appear-

ance of goods of other business

entities, dissemination of false,

inaccurate or distorted information

in any form or in any way, including

data containing information

discrediting a business entity's

goodwill or its founder's (share-

holder's, owner's) or employee's

reputation, and (or) may adversely

affect public confidence in a business

entity as a manufacturer of goods,

etc.

Unfair competition is prohibited

in Belarus. The legislation of the

Republic of Belarus provides for a

judicial and administrative proce-

dure for defense from unfair

competition, as well as civil,

administrative and criminal

sanctions for unfair competition.

In particular pursuant to clause

1.4 of Edict No 114 unfair competi-

tion is punished by a fine in the

amount up to 100 basic units for the

officials, up to 200 basic units for

individual entrepreneurs, for a legal

entity – up to 10% of the revenues

from sales of goods (works, services)

at the market of which such violation

has taken place, for the calendar year

preceding the year in which the

administrative offense has been

identified, or for a part of a calendar

year in which the administrative

offense has been identified that

precedes the date of identification of

an administrative offense, if an

offender has not carried out activities

on selling of these goods (works,

services) in a previous calendar year,

but at least 400 basic units.

11.3. General principles and

rules of competition in the

Eurasian Economic UnionSince January 1, 2015 the Treaty

on the Eurasian Economic Union

(EAEU) has come into force. The

parties of the Treaty on EAEU are the

Republic of Armenia, the Republic of

Belarus, the Republic of Kazakhstan,

Kyrgyz Republic and the Russian

Federation.

Issues concerning unfair

competition are regulated by Section

XVIII “General principles and rules of

competition”.

General rules of competition

mean a number of prohibitions set

forth to ensure efficient functioning

of the markets. The Treaty on the

EAEU prohibits:

§ abuse of a dominant position;

§ unfair competition;

§ agreements between legal

entities that have resulted or may

result in limitation of competition;

§ coordination of economic

activities of legal entities, if it causes

or may cause some negative

consequences.

More detailed provisions about

unfair competition are specified in

Annex 19 to the Treaty on EAEU

“Protocol on general principles and

rules of competition”.

This protocol, among other

things, determines:

§ penalties for violation of

general rules of competition in cross-

border markets;

§ the procedure for the Eurasian

Economic Commission to monitor

compliance with the general rules of

competition in cross-border markets,

as well as interaction with the

competent authorities of the

member states of the Treaty on

EAEU;

§ the procedure for cooperation

between competent authorities of

the member states when supervising

compliance with the competition

(antitrust) law.

The authorized bodies of the

member states to the Treaty on EAEU

are responsible for ending violations

of the general rules of competition in

the territories of such member states.

The Eurasian Economic Commission

restraints violations of the general

rules of competition, if such

violations have or may have an

adverse effect on competition in the

cross-border markets, except

financial ones.

The Republicof Belarus

as a partof the Eurasian

EconomicUnion

12

90Doing Business in Belarus 2017The Republic of Belarus as a part

of the Eurasian Economic Union

12.1. General information

about the Eurasian Economic

UnionThe Eurasian Economic Union

started functioning on January 1,

2015 (hereinafter – the EEU). Its

member-states are the Republic of

Belarus, the Russian Federation, the

Republic of Kazakhstan and the

Republic of Armenia, the Kyrgyz

Republic.

The EEU is an international

organization for regional economic

integration, established on the basis

of the Customs Union and the

Common Economic Space of the

Republic of Belarus, the Russian

Federation, the Republic of

Kazakhstan, aimed to create a single

market of goods, services, capital and

labor.

The EEU is based on the EEU

Treaty signed on May 29, 2014 by the

Republic of Belarus, the Russian

Federation and the Republic of

Kazakhstan. In 2014 the Republic of

Armenia and the Kyrgyz Republic,

which became member countries of

the EEU, joined to the EEU Treaty.

The main objectives of the EEU

are:

§ creation of conditions for

stable development of the econo-

mies of member-states in order to

improve the living standards of the

population;

§ creation of a single market of

goods, services, capital and labour

within the EEU;

§ comprehensive moderniza-

tion, cooperation and improvement

of the competitiveness of national

economies in the global economy.

A superior body of the EEU is

the Supreme Eurasian Economic

Council (hereinafter – the Supreme

Council), which is composed of the

heads of member-states of the EEU.

The Eurasian intergovernmen-

tal Council (hereinafter – the

Intergovernmental Council) operates

at the level of heads of governments

of the member-states of the EEU. Its

meetings are held when necessary

but at least twice a year.

A single permanent regulatory

body of the EEU is the Eurasian eco-

nomic Commission (hereinafter – the

EEC), the legal status of which is

regulated by Annex 1 to The EEU

Treaty.

Judicial functions of the EEU

are carried out by the Court of the

EEU. The Court of the EEU is a per-

manent body, located in the city of

Minsk, Republic of Belarus. It has the

authority to consider disputes arising

from the realization of the EEU

Treaty, international treaties within

the EEU and/or decisions of the au-

thorities of EEU at the request of

member-state or an entity on the

grounds established in paragraph 39

of the Statute of the Court of the EEU

(Annex 2 to the EEU Treaty).

The normative base of EEU

consists of:

џ the EEU Treaty;

џ the international agreements

within the EEU;

џ the resolutions of the Supreme

Council, the intergovernmental

Council, EEC.

The issues which are not regu-

lated by the above acts are regulated

by national legislation.

In 2017 it is planned to approve

the EEU Customs Code which has

been developed for three years. This

document aims to lay the founda-

tions for a transition to the unified

customs regulation within the EEU.

The EEU Customs Code will replace

the Customs Code of the Custom

Union adopted in 2009.

12.2. Tariff regulation in the

Eurasian Economic UnionTariff regulation of import of the

goods is carried out in accordance

with subsection 2 of section IX of the

EEU Treaty, the Protocol on the

Common Customs Tariff Regulation

(Annex No. 6 to the EEU Treaty), the

Protocol on the enrollment and dis-

tribution of import customs duties

(other duties, taxes and levies, having

equivalent application), they are

presented to the budget of the mem-

ber-states (Annex No. 5 of the EEU

Treaty).

Import customs duties

There is Uniform Customs Tariff

(hereinafter – the UCT) applied in the

territory of the EEU and approved by

the EEC.

UCT is a list of rates of customs

duties to be used with respect to the

goods imported from third countries,

systemized in accordance with the

Unified Goods Nomenclature of

foreign economic activity of the EEU.

As of January 1, 2017 by the decision

of the EEC Council No. 101 dated

18.10.2016 the Unified Goods

Nomenclature of foreign economic

activity of the EEU and the Unified

Customs Tariff were outlined as

amended.

Rates of the UCT imports cus-

toms duties are unified and as a rule

shall not be subject to changes de-

pending on entities transporting

goods through the customs border,

types of deals and other conditions.

The sums of paid import cus-

toms duties are apportioned pursu-

ant to the following standards:

џ Republic of Armenia – 1,11%;

џ Republic of Belarus – 4,56 %;

џ Republic of Kazakhstan – 7,11 %;

џ Kyrgyz Republic – 1,9 %;

џ Russian Federation – 85,32 %.

Export customs duties

Regarding export customs du-

ties, the EEU state members have an

Agreement on Export Customs

Duties Regarding Third Countries

dated 25 January, 2008.

The EEU member countries are

entitled to define export customs

duties which are applied if the goods

are exported from the territory of a

certain state or where the fact of

unlawful goods transportation

across the EEU custom border has

been revealed in the territory of such

state.

As of January 1, 2017 the

Republic of Belarus has established

export customs duties on the follow-

ing goods:

џ potash fertilizers;

џ timber;

џ rawhide;

џ rape seeds;

џ crude oil and some goods

produced from oil.

However, today a unified proce-

dure for payment and distribution of

export customs duties between EEU

member-states has not been set.

12.3. Tariff preferences

applied by the state members

of the Eurasian Economic

UnionThe Protocol on the Unified

Customs Tariff Regulation (Adden-

dum No. 6 to the EEU Treaty) stipu-

lates that the tariff benefits in the

form of exemption from import cus-

toms duty shall be granted with re-

gard to the following goods imported

in the EEU customs territory from the

third states:

1) goods imported as a foreign

founder's contribution to the autho-

rized capital within the time frames

as defined by the constitutive docu-

ments in order to form the authorized

capital;

2) goods imported within the

terms of international cooperation in

cosmic research including rendering

services on space launching in com-

pliance with the list defined by the

Commission;

3) products of offshore opera-

tions of member states' ships and

ships leased (chartered) by the legal

entities and/or private individuals of

member states;

4) currency of member states,

currency of third states (except for

currency used for numismatic pur-

poses), and securities according to

the legislation of the member states;

5) goods imported as humani-

tarian assistance and/or for control of

natural calamities, accidents or ca-

tastrophes;

6) goods, except for excise

goods (but for motor vehicles dedi-

cated for medical purposes), im-

ported through any third countries,

international organizations or gov-

ernments for charitable purposes

and/or acknowledged in accordance

with the member states' legislation

as gratuitous aid (cooperation), in-

cluding technical assistance (sup-

port).


of Belarus stipulates the following

tariff benefits:

1. In accordance with the Edict


Belarus No. 6 of 07.05.2012 “On en-

couragement of entrepreneurial

activity in the territory of medium,

small urban and rural areas”, business

entities registered in the territory of

small towns and rural areas are ex-

empt from import customs duties for

certain types of goods imported in


Belarus as non-monetary contribu-

tion to the authorized capital of these

entities, provided not more than 5

years has passed from their produc-

tion date. Goods which are subject to

exemption from customs duties for

the purpose of authorized capital

formation include transport vehicles

of industrial purpose and light motor

vehicles, various types of equipment,

ships and other goods.

2. In accordance with the Edict


Belarus No. 5 of 31.08.2015 “On for-

eign gratuitous aid”, foreign gratu-

itous aid received by legal entities

and individual entrepreneurs for

certain purposes (scientific research,

preservation of historical and cul-

tural heritage, development of cine-

matography, music, theatre and other

arts, healthcare delivery and other

purposes) are as per the decision of

the Property Management

Directorate of the President of the

Republic of Belarus by agreement

with President of the Republic of

Belarus exempt from customs duties

and customs fees, VAT, excise duties,

income tax, tax under the simplified

tax system, unified tax for agricul-

tural producers and income tax from

private individuals.

3. Pursuant to Decision No. 9 of

the EEC Council of 19.03.2012, the

goods imported to the customs terri-

tory of the Customs Union for the

purposes of construction and opera-

tion (within the warranty period) of

the Belarusian nuclear power station

are exempt from customs duties,

provided the state institution “Direc-

torate of the Nuclear Power Station

Construction” has confirmed to the

tax authority that such imported

goods are meant for such purposes.

4. By the Decision of the

Customs Union Committee as of

22.06.2011 No727 list of the goods to

be imported to the territory of the

Customs Union within the scopes of

international cooperation in the

sphere of space investigation and use

including rendering services in space

launching and which are the subject

to customs fees and duties exemp-

tion has been defined.

5. Pursuant to cl. 7.1.11 of the

Decision No. 130 of the Customs

Union Committee of 27.11.2009,

processing equipment, its compo-

nents and spare parts, raw and other

materials which are being imported

exclusively for use in the territory of a

member state of the Customs Union

under an investment project shall be

exempt from customs fees and du-

ties.

At the national scale the men-

tioned procedure of tax benefits has

been stipulated by the following

main regulatory legal acts:

5.1. The Edict of the President of

the Republic of Belarus No. 10 of

06.08.2009 “On creation of additional

conditions for investment in the

Republic of Belarus” stipulates that

during the continuance of the invest-

ment agreement the investors shall

be entitled to exemption from import

customs duties and VAT imposed by

the customs authorities with respect

to production equipment, its compo-

nents and spare parts imported into


Belarus for exclusive use in the terri-

tory of the Republic of Belarus under

an investment project.

Doing Business in Belarus 2017 91The Republic of Belarus as a part




22.09.2005 “On the High Tech Park”

stipulates that residents of the High

Tech Park are exempt from import

customs duties and VAT imposed by

the customs authorities on produc-

tion equipment, its component

and/or spare parts imported into the

territory of the Republic of Belarus for

exclusive use in the territory of the

Republic of Belarus under such types

of investment projects as stipulated

by the Regulations on the High Tech

Park.



30.06.2014 “On activities by the

China-Belarus “The Great Stone”

Industrial Park” stipulates that goods

(production equipment, its compo-

nent and spare parts, raw and other

materials) imported to the territory of

the Republic of Belarus for exclusive

use in the territory of the Republic of

Belarus under investment projects

related to the China-Belarus

Industrial Park including construc-

tion and equipping of Park's facilities

shall be exempt from import customs

duties (with due account for interna-

tional obligations of the Republic of

Belarus) and VAT normally imposed

by customs authorities.

12.4. Unified measures of

non-tariff regulation

in the EEUNon-tariff measures are a set of

measures to regulate foreign trade,

carried out by the introduction of

quantitative and other economic

restrictions.

The following measures of non-

tariff regulations are allowed within

the territory of the EEU:

џ ban import and/or export;

џ quantitative restrictions on

import and/or export;

џ exclusive right to export and/or

import;

џ automatic licensing (supervision)

export and/or import;

џ permissive procedure for import


and/or export.

Non-tariff measures are intro-

duced and applied on the principles

of transparency and non-

discrimination in the manner pre-

scribed by Annex 7 to the EEU Treaty.

12.4.1. Quantitative restric-

tions on export and/or import

Within the territory of the EEU

quantitative restrictions may be

applied in the form of export and

import quotas.

The decision to apply quotas

shall be made by the EEC. EEC ap-

portions scopes of quotes among

member-states of the EEU and de-

termines a method of quota appor-

tion among the subjects of foreign

economic activity of the EEU. If nec-

essary, EEC apportions the scope of

an import quota among third coun-

tries.

The goods with respect to

which export quotas may be applied

must be included in the list of essen-

tial goods for the internal market of

the EEU. Such a list is set out by

Decision of the EEC No. 168 “On en-

suring the functioning of a unified

system of tariff regulation of the

Customs Union of Belarus,

Kazakhstan and the Russian

Federation”.

Export and import quotas are

established for an indefinite period of

time.

Quantitative restrictions do not

apply to:

§ import of the goods origi-

nated from a third country or export

of the goods intended for the

territory of any third countries. If only

such quantitative restrictions do not

apply to imports from all third

countries or export to any third

country;

§ trade of the goods in the

framework of international treaties

on free trade zones.

12.4.2. Exclusive right to export

and/or import

In accordance with the decision

of EEC the list of the goods to be

exported or imported on the basis of

an exclusive right as well as partici-

pants of foreign economic activity

that are given an exclusive right to

export (import) certain types of

goods is subject to publication on the

official website of the EEU in the

Internet http://www.EEUnion.org/).

At the moment, in Belarus the

state has the exclusive right to im-

port alcoholic beverages, raw to-

bacco and tobacco products.

Moreover the state has the

exclusive right to export mineral,

potassium or chemical potassium

fertilizers.

12.4.3. Automatic licensing

(supervision)

This is a temporary measure set

in order to monitor the dynamics of

export and/or import of certain

goods. The list of goods and duration

of such measures are established by

the EEC.

Export and/or import of goods,

in respect of which automatic licens-

ing (supervision) is introduced, is

carried out in the presence of permits

issued by the competent authority in

the manner determined by the EEC.

Permits are issued in accor-

dance with the Annex to the Protocol

on measures of non-tariff regulation

in relation to third countries.

12.4.4. Permissive procedure

for import and/or export of goods

A permissive procedure is im-

plemented through the introduction

of licensing or other administrative

measures to regulate foreign trade.

The introduction, use and abolish-

ment of the permissive procedure are

adopted by the decision of EEC.

Licenses are issued in accor-

dance with the Annex to the Protocol

on measures of non-tariff regulation

in relation to third countries.

Types of licenses:

§ One-time licence (the term of

validity is no longer than 1 year after

commencement (can be limited by

the validity period of a foreign trade

contract or the expiry date of the

document, which is the basis for the

licenses)).

§ General licence (the term of

validity is no longer than 1 year after

The Republic of Belarus as a part



commencement, and for goods in

respect of which quantitative

restrictions are introduced, the term

ends in the calendar year to which

the quota is set, unless otherwise

stipulated by the decision of the EEC.

§ Exclusive licence (the term of

validity is determined by the decision

of EEC in each specific case).

12.5. Indirect taxationIndirect taxation in the EEU is

regulated by articles 71 and 72 of the

EEU Treaty and the Protocol on pro-

cedure of levying indirect taxes and

mechanisms for their payment upon

export and import of goods, perfor-

mance of work, provision of services

(Annex 18 to the EEU Treaty).

12.5.1. Indirect taxation of

export of goods

Zero rate of VAT and/or exemp-

tion from payment of excises are

applied during the export of goods if

there are documents specified in

paragraph 4 of the Protocol on the

procedure of levying indirect taxes

and mechanisms for their payment

upon export and import of goods,

performance of work, providing ser-

vices (Annex 18 to the EEU Treaty)

submitted to the tax authority.

The term for submission of

these documents is 180 calendar

days from the date of delivery (ship-

ping) of the goods.


import of the goods

Indirect taxes are levied by the

tax authority of an importer upon

import of goods in the territory of a

member-state of the EEU from the

territory of another member-state of

the EEU.

The rates of indirect taxes are

determined in accordance with the

legislation of an importing country.

Indirect taxes are not levied

upon import of goods in the territory

of a member-state of the EEU in the

following cases:

§ in respect of goods which in

accordance with the legislation of

that member-state are not taxable

(exempt from tax) as for import into

its territory;

§ in respect of goods imported

into the territory of a member-state

by individuals not for business

purposes;

§ in respect of goods imported

into the territory of one member state

from the territory of another member

state in connection with their

transfer within the same legal entity

(the legislation of a member state

can establish an obligation to notify

the tax authorities about the import

(export) of such goods).


performance of works, provision of

services

As a general rule indirect taxes

are levied upon performance of

works, provision of services within

the member-state of the EEU that is

considered as a place of such perfor-

mance of works, provision of services.

As for performance of works,

provision of services a taxable base,

tax rates, a procedure for tax collec-

tion and tax concessions (tax exemp-

tion) are determined according to the

laws of the member-state of the EEU,

the territory of which is considered as

a place of performance of works,

provision of services.

12.6. Supervision over safety

and quality of goods in the

EEUSupervision over safety and

quality of goods within the territory

of the EEU means registration, test-

ing and confirmation of conformity

(declaration, certification of prod-

ucts), examination, registration of

product safety, veterinary control,

quarantine control and phytosanitary

control.

12.6.1. Certification (declara-

tion of conformity)

A unified list of products subject

to mandatory conformity assessment

(with further issuance of conformity

certificates and conformity declara-

tions under a unified form for techni-

cal regulatory acts) is applicable in

the territory of the EEU. Assessment

and confirmation of conformity will

be carried out by the following au-

thorities and in the following forms:

§ product testing: in an certified

laboratory (research center) included

on the uniform register of EEU

conformity assessment authorities;

§ certification (declaration of

conformity): in a conformity

assessment authority included on the

uniform register of EEU conformity

assessment authorities.

The certificate (declaration of

conformity) shall be compiled ac-

cording to the common EEU format.

There is no requirement on a

specific country of product testing or

certification procedure. For instance,

a Belarusian manufacturer may un-

dergo certification in Russia or

Kazakhstan, and then use the certifi-

cate in Belarus.

The uniform certificate (decla-

ration of conformity) are valid in the

entire EEU territory and will be ac-

cepted without any requirements on

reissuance or any additional proce-

dures. Therewith, these certificates

will be issued not only in respect of

products manufactured in the EEU,

but also in respect of products im-

ported from third countries.

As of January 1, 2016 in the

Republic of Belarus, only the objects

of conformity assessment, with re-

gard to which the technical guide-

lines of the EEU or internal technical

guidelines impose requirements, are

the subjects of compulsory confirma-

tion.

Unfortunately today single EEU

certification does not cover all types

of the goods. Currently the EEU is in

process of unification of technical

regulatory acts – Technical Rules

aimed to establish the common uni-

form requirements for all member-

states of the EEU.

As of December 22, 2016 the

EEC has adopted 35 EEU Technical

Rules:

§ On safety of meat and meat

products;

§ On safety of milk and milk

products;

§ On safety of high pressure




equipment;

§ On safety of railway rolling

stock;

§ On safety of high-speed

railway transport;

§ On safety of railway transport

infrastructure;

§ On safety of fireworks;

§ On safety of packages;

§ On safety of low voltage

equipment;

§ On safety of toys;

§ On safety of perfumes and

cosmetics;

§ On safety of products

intended for children and adoles-

cents;

§ On safety of machines and

equipment;

§ On safety of lifts;

§ On safety of equipment for

work in explosive environments;

§ On requirements for automo-

bile and aviation gasoline, diesel and

marine fuel, jet fuel and heating oil;

§ On safety of motor roads;

§ On safety of gas-fired

mechanisms (instruments);

§ On safety of grain;

§ On safety of wheel (tire)

transport (carrier vehicle);

§ Technical order on fat-and-oil

production;

§ On safety of food production;

§ Food production marking

(Marking of food production);

§ On safety of light industry

production;

§ On safety of body armor

facilities;

§ Technical order on juice

production (from) of fruits and

vegetables;

§ Electromagnetic compatibil-

ity of technical facilities (tools);

§ On the safety of agricultural

and forestry tractors and trailers;

§ On requirements for oils and

special fluids;

§ Safety food additives,

flavorings, and processing aids;

§ On the security of explosives

based on them;

§ On the safety of certain types

of specialized food products,

including dietary medical and dietary

preventive nutrition;

§ On the safety of small vessels;

§ On the safety of furniture

products;

§ Technical order on tobacco

products;

§ Requirements as to liquified

hydrocarbon gases to be used as fuel

(to become effective as from 1

January, 2018).

12.6.2. Registration of goods

safety

Import and circulation of partic-

ular goods within the EEU are made

only on the basis of the document

confirming state registration of the

goods safety. This applies to such

products as products for children,

household products and other prod-

ucts directly connected with a human

body.

State registration is the proce-

dure of conformity assessment of

products with the single sanitary-

and-epidemiological and hygienic

requirements or the requirements of

technical rules which is carried out by

the authorized body in the sphere of

sanitary-and-epidemiological wel-

fare of the population.

The document confirming

safety of products (goods) is the state

registration certificate issued in the

single form established by the EEC.

Recognition of documents con-

firming safety of production (goods),

in terms of their conformity with the

sanitary-and-epidemiological and

hygienic requirements, issued in one

of the member-states of the EEU is

carried out without re-issuance of

documents of another state-member

of the EEU (country of destination)

and without repeated laboratory

tests (trials).

12.6.3. Veterinary control

The decision of the EEC dated

June 18, 2010 No. 317 “On application

of veterinary and sanitary methods in

the Customs Union” approves the

Uniform List of controllable goods of

animal origin as well as uniform

requirements for all three member-

states of the Customs Union. At the

moment the decision applies to mem-

ber-states of the EEU.

The goods subject to veterinary

control (supervision) shall be im-

ported under the relevant permit of

an authorized body of the EEU mem-

ber-state and a veterinary certificate

issued by the authorized body in the

sphere of veterinary medicine ac-

cording to the legislation of such

member-state. Circulation of the

goods subject to veterinary control

within the EEU is carried out on the

basis of the veterinary certificate, the

single form of which is established by

the EEC.

12.6.4. Quarantine and

phytosanitary control

There is the List of controllable

products, which are the subjects to

phytosanitary quarantine control on

the customs border and single re-

quirements to vegetable products

such as fruits, vegetables, flowers and

other products, transport boxes, pack-

age, soil, organisms in the EEU.

Imported goods shall comply with

phytosanitary requirements of that

member-state of the EEU where the

destination of controllable products

is located and shall be accompanied

by a phytosanitary certificate.

12.7. Customs measures

protecting the intellectual

property objectsIn the frameworks of the EEU

there is a unified customs register of

IP objects of the member-states of

the EEU (hereinafter – the UR) aimed

at common protection of IP objects

within the EEU. As of 22 December,

2016, 284 IP objects have been in-

cluded in the UR. The UR has not

replaced national registers which are

still valid each as for respective coun-

try.

In order to include IP objects in

the UR it is necessary to submit an

application followed with a list of

required documents. One application

shall be submitted in respect of one

IP object. The Intellectual Property

Objects are added into the UR free of

charge.




The application may be submit-

ted by a proprietor, several propri-

etors (including, if different propri-

etors in different countries have the

rights to the same IP object– upon

their common consent), a representa-

tive having a permanent representa-

tive office in the territory of the EEU

under the power of attorney valid

within the whole territory of the EEU

(a proprietor can act as a representa-

tive).

The IP objects are added into

the UR for the period not longer than

2 years. This period can be extended

unlimited number of times on the

basis of the rightholder's (his repre-

sentative's) application but each time

not longer than for 2 years. The IP

object can be added into the UR for

no longer than the term of IP object's

legal protection in EEU member-

state in which the term expires ear-

lier.

Consequences of listing IP

object in the UR:

§ If during customs procedures

customs authorities discover a

breach they are obliged to:

§ suspend release into free

circulation for up to 10 days (may be

prolonged one more time for extra 10

days);

§ notify the declarant and

proprietor of such suspension within

1 day, as well as of the reasons

therefor and terms thereof;

§ then either arrest (confiscate)

the object or cancel the resolution on

suspension.

§ If there is no breach found the

right holder will indemnify the

damage to a declarant.

12.8. The EEU functioning

within the multilateral trade

systemAll member countries of the

EEU (the Russian Federation, the

Republic of Kazakhstan, The Republic

of Armenia, the Kyrgyz Republic)

except for the Republic of Belarus are

the members of the World Trade

Organization (hereinafter – “the

WTO”).

Thus, the Treaty on Functioning

of the Customs Union within the

Framework of the Multilateral Trade

System signed on May 19, 2011 ap-

plies to member-states of the EEU.

The Treaty stipulates the rules for

regulation the rates of import duty

within the EEU if they are different

with the rates of the WTO, and de-

fines the necessity to bring the regu-

latory system of the EEU to the com-

pliance with the WTO acts.

The Republic of Belarus created

a Committee on WTO Accession and

has been carrying on active negotia-

tions on Belarus' accession to the

WTO.



IntellectualProperty13

97Doing Business in Belarus 2017 Intellectual Property

At the moment in Belarus legal

protection may be granted to the

following objects of intellectual

property:

13.1. Objects of copyright and

related rightsThe above objects include any

works of science, literature and art,

which are a result of creative activity,

regardless of the purpose and dignity

of the works, mode of expression

(copyrights) and performance

thereof, as well as phonograms and

broadcasts of broadcasting compa-

nies and cable transmission organi-

zations (objects of related rights).

The copyrights have the great-

est scope of legal protection.

The legal protection period for a

copyright and related rights begins

with creation of the object and does

not require compliance with any

formalities. Moral rights of an author

(copyright, the right to name, right to

inviolability of the work, the right of

disclosure, the right to recall) are

protected indefinitely. Property rights

of an author are protected during

his/her lifetime and within 50 years

after his/her death.

The property rights of an author

may be transferred to third parties by

assignment of rights, as well as under

an exclusive or nonexclusive license.

The holder of property rights is

entitled to prohibit or authorize the

following actions concerning the

object:

§ reproduction in any form;

§ distribution of originals or

copies of the object and its renting;

§ public performance of objects;

§ public presentation or any

other form of showing to the public;

§ translation into other

languages;

§ modifications or other

revision;

§ import of work copies;

§ on-air transmission;

§ transmission by cable;

§ other possible actions.

The remedies of civil legal pro-

tection of copyright and related

rights in the event of their violations

are:

§ a withdrawal of material

objects with the help of which

exclusive rights have been violated,

and material objects created as the

result of such violations. Counterfeit

copies of works, recorded perfor-

mances, phonograms, broadcasts of

broadcasting companies and cable

transmission organizations must be

confiscated under a court decision;

§ an compulsory publication of

a violation with information about an

actual owner of a violated right;

§ recovery of damages,

including lost profits;

§ a compensation to be paid in

the amount from 10 up to 50

thousand basic units (as of January

20, 2017 the basic unit makes

approximately 11 Euro) instead of

recovery of damages;

§ other remedies specified by

the law.

In addition, the legislation pro-

vides for an administrative or crimi-

nal liability for certain types of viola-

tions of copyright or related rights.

13.2. Industrial property

objects13.2.1. Inventions, utility

models, industrial designs

An invention in any field of

technology gets the legal protection

if it is new, relates to a product or a

process, involves an inventive step

and is industrially applicable.

A useful model having the legal

protection is a technical solution

relating to the devices, moreover it is

new and industrially applicable.

An industrial design is specified

by the law as an artistic or art-design

solution for a product that defines its

look, it is new and original.

Legal protection of inventions,

utility models and industrial designs

is certified with a patent. A patent is

valid from the date of application to

the National Centre of Intellectual

Property (hereinafter – NCIP):

§ for inventions – within 20

years, it is renewable for up to 5

years;

§ for a utility model – within 5

years, it is renewable for up to 3

years;

§ for an industrial design –

within 10 years, it is renewable for up

to 5 years.

Attribution of authorship, com-

pulsion to co-authorship, illegal

disclosure of the essence of an inven-

tion, utility model and industrial

design before submitting a relevant

application without the author's

permission, as well as violations of

exclusive rights of patent holders

entail a civil, administrative or crimi-

nal liability.

Civil remedies of protection of

violated rights are:

§ suppression of unlawful acts

violating copyrights and threatening

to their violation;

§ recovery of damages;

§ an obligatory publication of a

violation with information about the

actual owner;

§ a withdrawal of material

objects with the help of which

exclusive rights have been violated,

and material objects created as the

result of such violation;

§ other remedies specified by

the law.

13.2.2. Means of

individualization

Means of individualization

having legal protection in the

Republic of Belarus are trademarks

(service marks), brand names, geo-

graphical indications.

A trademark (service mark) is a

designation that distinguishes goods

or services of one person from goods

or services of others.

A brand name refers to a name

of a legal entity used for individual-

ization thereof for civil law purposes.

A geographical indication is a

designation that identifies goods as

originating from a certain country or

a region or locality in that territory,

where a certain quality, reputation or

other characteristics of the goods are

to a great extent connected with its

geographical origin.

In order to obtain legal protec-

tion all the above means of individu-

alization must be registered with the

NCIP with the subsequent issuance

of a registration certificate.

The Republic of Belarus is a

party to the Madrid WIPO Agreement

"On International Registration of

Marks" (along with the Protocol

Relating to the Madrid Agreement on

International Registration of Marks

(signed in Madrid on June 28, 1989),

therefore it is possible to get legal

protection for a trademark in the


through registration in the WIPO

under the Madrid system with exten-

sion of rights to the territory of

Belarus.

There has been no unified

trademark registration system cre-

ated within the framework of the

Eurasian Economic Union yet. To

obtain legal trademark protection in


Belarus, the Russian Federation, the

Republic of Kazakhstan, Kyrgyz

Republic and the Republic of Armenia

an economic entity should register a

trademark in each of these states, or

use the WIPO international registra-

tion with extension of registration

data to the above countries.

However there is a regional

principle of exhaustion of rights in

the countries of the Eurasian

Economic Union. It means that there

is no violation of the exclusive rights

to a trademark, if this trademark is

used on the goods lawfully intro-

duced into the civil turnover in the

territory of member states of the

Eurasian Economic Union directly by

a trademark owner or by some other

person with the owner's consent.

The legal protection period for

trademarks (service marks) and geo-

graphical indications is 10 years, it is

renewable for another 10 years for an

unlimited number of times.

The legal protection period for

brand names is in effect until a legal

entity is liquidated or changes its

corporate name.

The ways to protect rights to

means of individualization are:

§ suppression of unlawful acts

violating the law and posing a threat

to their violation;

§ reimbursement for damages;

§ a compensation to be paid in

the amount from 1 up to 50 thousand

basic units (as of January 17, 2017 the

basic unit makes approximately 10

Euro) instead of reimbursement for

damages (applied since July 15,

2016).

§ removal of the unlawfully

used trademarks or designations

similar to the extent of confusion

from counterfeit products, labels or

packaging thereof; and if it is

impossible – a withdrawal from the

civil turnover and destruction of

counterfeit products, labels,

packaging thereof.

Disputes relating to protection

of intellectual property are resolved

by the Judicial Board for Intellectual

Property of the Supreme Court of the


The above-mentioned objects

of intellectual property are the most

common and mostly require protec-

tion against unauthorized use.

However, in addition to these objects

legal protection in Belarus also cov-

ers selection achievements, layout

designs of integrated circuits, pro-

duction secrets (know-how).

Doing Business in Belarus 2017 98 Intellectual Property

ConsumerProtection and

Advertising14

100Doing Business in Belarus 2017 Consumer Protection and Advertising

In Belarus consumer rights are

protected by the law of the Republic

of Belarus “On protection of con-

sumer rights” dated 09.01.2002. This

law stipulates main obligations of a

seller (manufacturer) and main rights

of a consumer with regard to infor-

mation on goods (works, services)

and quality thereof, as well as a

seller's (manufacturer's) liability to a

consumer, a procedure and instru-

ments for consumer protection.

14.1. Information about

goods and a seller

(manufacturer)A seller (manufacturer) is

obliged to provide a consumer with

full and accurate information about

itself and about its goods (works,

services).

Information about a seller (man-

ufacturer) includes:

§ company name;

§ company's location and

working hours;

§ name of branches, representa-

tive offices (if any);

§ information on a special

permission (license) to perform

respective types of activities (its

number, issuing body, validity period),

if such activities are subject to

licensing.

Information about goods

(works, services) includes:

§ name of goods (works,

services);

§ types and features of

proposed works (services);

§ quantity and completeness of

goods;

§ price and terms of payment for

the goods (works, services);

§ date of manufacture (service

life, shelf life, expiration date of

goods and results of works);

§ general consumer character-

istics of goods (results of works,

services);

§ terms and conditions of

effective and safe use;

§ name and location of a

manufacturer (seller, performer), and

other characteristics;

§ reference to main legal

documents specifying requirements

for the quality of goods (works,

services);

§ warranty period if any;

§ identification bar code, if such

obligatory marking of the goods is

provided for by the legislation;

§ information about the

conformity of goods (works, services)

which are subject to obligatory

confirmation of quality.

There are additional data to be

indicated for some categories of

goods.

Information must be communi-

cated to consumers in the Belarusian

or Russian language clearly and legi-

bly in the documentation accompa-

nying goods (works, services), on

consumer packaging (packing), on a

label, in catalogs, brochures, adver-

tisements or other information

sources, including in the global com-

puter network Internet. It is permit-

ted to use a foreign language only at

the request of a consumer.

14.2. Obligations of a

manufacturer (seller or

performer)14.2.1. Obligations of a manu-

facturer (seller, performer) to ensure

safety of goods (works, services)

§ to ensure safety of goods

within a specified period of service

and a shelf life, and if such period is

not fixed and sale of goods (works,

services) is allowed without this term

– within 10 years from the date of

sale of goods to a consumer;

§ to inform a consumer about

possible risks, conditions of safe use

of a product (result of work, services),

special rules to be followed during

storage, transportation and disposal

of a product (result of work);

§ to sell goods (works, services)

subject to state hygienic regulation

and registration and (or) to manda-

tory conformity assessment only with

appropriate certificates and (or)

documents of such conformity

assessment. These products include

household appliances, electronic

equipment, lighting products,

playground equipment, communica-

tion equipment, furniture, products

for construction, food products,

alcoholic beverages, services and

works, etc.;

§ to suspend production

(selling) of goods (works, services)

immediately, if in compliance with

governing regulations they cause or

may cause harm to life, health,

heredity, property of a consumer and

the environment, until causes of such

harm are eliminated, and if such

causes cannot be eliminated – to

remove goods (works, services) from

production and to take necessary

measures to inform a consumer

about possible dangers.

14.2.2. Obligations of a manu-

facturer (performer, seller) to estab-

lish service life, expiration date, shelf

life, warranty period for goods

(works, services)

§ to establish service life (a

period during which a manufacturer

(performer) is obliged to ensure the

possibility of using goods for

intended purposes by a consumer) of

durable goods, including spare parts

and components of a basic product,

which after a certain period can be

dangerous to life, health, heredity,

property of a consumer and the

environment. The list of such goods is

set forth by the Government of the


In particular, this list includes

vehicles, household appliances, tele-

vision and radio electronics, commu-

nication equipment and other goods;

§ to establish expiration date

and (or) shelf life (a period during

which the product is considered

suitable for the intended use, retains

its properties) for food products,

perfumes, cosmetics, drugs and other

similar products (results of works),

consumer properties of which may

eventually deteriorate;

§ in cases stipulated by the law,

to establish warranty period for a

product (result of works, services),

during which such product (result of

works, services) must comply with

quality requirements. In this case, the

warranty period for goods manufac-

tured outside the Republic of Belarus

shall not be less than the warranty

period provided for by the legislation

of the Republic of Belarus for similar

goods produced in the territory of the


14.2.3. Obligations of a manu-

facturer (seller, supplier, performer)

to ensure the possibility of using the

product (result of work) for the in-

tended purpose, its repair and main-

tenance

§ to ensure a possibility of using

a product (result of work) as intended

during its service life;

§ to ensure a possibility of

repair and maintenance of goods,

production and supply of spare parts

to trade and repair organizations in

the range and scope required for such

repair and maintenance within the

period of production of goods

(works), after such goods have been

withdrawn from production

(termination of works) - within

service life of a product (result of

work), and in the absence of such

term - within 10 years from the date

of selling such goods (works) to a

consumer;

§ to ensure a possibility of

maintenance and repair of goods

(excluding real estate) within the

warranty period, and if the warranty

period is not fixed or is less than two

years - within two years from the date

of selling such goods to a consumer,

unless a longer period is established

by the law and (or) by an agreement.

14.3. Liability of a seller14.3.1. Liability of a seller (man-

ufacturer, supplier, representative,

performer) for improper information

about goods (works, services)

If a consumer is not provided

with the opportunity to get necessary

and accurate information about

goods (works, services) immediately

in the place of their sale, a consumer

is entitled to demand a compensa-

tion for damages caused by unrea-

sonable evasion of a contract conclu-

sion, and if such contract is signed -

within a reasonable period to de-

mand termination of the contract and

a refund of money paid.

If there is no necessary and

accurate information about a product

(work, service) provided to a con-

sumer, a consumer is entitled to make

claims arising from the sale of goods

(works, services) of inadequate qual-

ity, about defects in the goods (works,

services) revealed after delivering

such goods (works services) to a con-

sumer, if a consumer can prove that

such defects have appeared in con-

nection with a lack of relevant infor-

mation.

If a failure to provide relevant

information (provision of inappropri-

ate or insufficient information) about

the goods (works, services) results in

damage to life, health, heredity or

property of a consumer, such con-

sumer is entitled to make demands

on indemnification by a seller (manu-

facturer, performer).

14.3.2. Liability of a seller (man-

ufacturer, performer) for damage

caused by defects in goods (works,

services)

Damage to life, health, heredity

or property of a consumer caused by

defects in goods (works, services)

shall be reimbursed in full by a seller

(manufacturer, performer), regardless

of its guilt and whether a consumer

has been in a contractual relation-

ship with it or not.

The harm caused by defects in

the goods (results of works, services)

shall be reimbursed if it has arisen

within the specified shelf life or

service life of a product (result of

work), and in absence thereof –

within 10 years from the date of man-

ufacture of the goods (works, ser-

vices).

14.3.3. Liability of a seller in the

event of sale of defective goods

A consumer to whom goods of

inadequate quality have been sold, if

defects of such goods have not been

specified by a seller, may demand at

its discretion:

§ replacement of a defective

product by a product of good quality;

§ proportionate reduction in a

purchase price;

§ free immediate elimination of

product defects;

§ reimbursement for expenses

on elimination of product defects;

§ termination of a sale-and-

purchase contract and refund of the

money paid for the goods.

The consumer is entitled to

make these claims to the seller (man-

ufacturer, supplier, representative) in

respect of product defects within the

warranty period or shelf life of a prod-

uct.

Moreover, if there is a dispute on

existence of product defects and

their causes between a consumer and

a seller (manufacturer, supplier, rep-

resentative), a seller (manufacturer,

supplier, representative) must ar-

range examination of the goods at its

own expense.

14.3.4. Consumer's right to

return goods of good quality

Within 14 days from the date of

a delivery of nonfoods a consumer

may return such goods of adequate

quality or exchange them for similar

goods of other size, shape, dimension,

style, color or configuration, and if

there is difference in the price, a con-

sumer shall make a corresponding

recalculation with a seller.

In order to exercise this right a

consumer must meet the following

requirements:

§ the goods have not been used;

§ consumer properties of the

goods have remained;

§ a consumer must have a proof

of purchase of the goods from a seller

to whom this claim is made.

Certain goods are not subject to

exchange and return. The list of such

goods is fixed by the Government of

the Republic of Belarus. Such goods

include cars, drugs, tobacco products,

printed publications and other

goods.

14.4. AdvertisingThe legislation of the Republic

of Belarus specifies obligatory re-

quirements and restrictions concern-

ing:

§ advertising of certain goods

or services (drugs, medical devices,

cosmetic products, alcoholic

beverages, beer and low-alcohol

Doing Business in Belarus 2017 101 Consumer Protection and Advertising

beverages, tobacco products, etc.);

§ advertising locations (for

example, the restriction on advertis-

ing in the premises of state bodies);

§ means of advertising (mass

media, television, billboards, etc.);

§ content of advertisements (for

example, the requirement for

presence of necessary information,

etc.).

The following types of advertis-

ing require an advance approval by

state bodies:

§ outdoor advertising – Minsk

City Executive Committee, executive

committees of regional cities,

regional executive committees. The

Council of Ministers of the Republic

of Belarus fixes a list of outdoor

advertising media which do not

require such approval;

§ vehicle advertising – Minsk

City Executive Committee executive

committees of regional cities,

regional executive committees and

as a general rule a relevant subdivi-

sion of the State Automobile

Inspection (GAI) of the Ministry of

Internal Affairs of the Republic of

Belarus);

§ advertising of drugs, methods

of medical care, works and (or)

services qualified as medical

activities, as well as medical

equipment and devices – the Ministry

of Health of the Republic of Belarus;

§ advertising of services

concerning job placement and

education of Belarusian citizens

abroad – the Ministry of Internal

Affairs.

Such forms of inappropriate

advertising as unfair, misleading,

unethical, hidden advertising are

prohibited under the legislation of


In the event of placement (dis-

tribution) of improper advertising the

Ministry of Trade of the Republic of

Belarus or a local executive and ad-

ministrative body may issue an order

to eliminate violations. Such order

may include a requirement for coun-

ter advertising. Counter advertising

in this case is carried out by an of-

fender at its own expense within the


period prescribed in the order, in the

same way as the improper advertis-

ing has been made, and it must con-

tain the wording "counter advertis-

ing".

In the event of failure to fulfill

such order to eliminate violations,

placement (distribution) of improper

advertising must be stopped by a

local executive and administrative

body which is entitled to reimburse

incurred expenses at the expense of

the offender.

Consumer Protection and Advertising

Renewableenergy sources15

104Doing Business in Belarus 2017 Renewable energy sources

Green energy is one of the most

dynamic sectors of Belarusian econ-

omy. Renewable energy sources

(hereinafter RES) are:

џ sun energy;

џ wind energy;

џ terrestrial heat energy;

џ energy of natural water flows;

џ energy of fire-wood and other

types of biomass;

џ biogas energy;

џ other energy sources not

classified as non-renewable.

As of 1 July, 2016, Belarus has 17

biogas stations (25.7 MW), 50 hydro

power plants (33.5 MW), 31 solar

power stations (37 MW) and 65 wind

power stations (56.7 MW).

The Energy Efficiency govern-

ment programme provides for con-

struction of a range of new RES

plants by the year 2020, including

biogas stations with a total power

over 30 MW, hydro power plants –

over 80 MW, solar power plants –

over 250 MW, and wind farms – over

200 MW.

Government activities in RES

industry are based on the policy of

government support and stimulation

of RES usage. This policy practically

means that:

1. government guarantees that

RES energy producers will be con-

nected to public energy networks;

therewith, each public energy pro-

vider must accept all energy offered

by such RES producer;

2. public energy providers will

pay for the RES energy according to

specified tariffs;

3. RES energy producers will

enjoy a number of customs and tax

privileges.

15.1. Pricing in RES industryTariffs for RES electric energy

sold to public providers will be deter-mined under the following formula:

Tariff = tariff on electric energy for industrial (and industrial equivalent) consumers having a connected load of up to 750 kV·А (11 eurocents in equiva-lent) Х specified factor (from 0.7 to 2.7).

The specified factor is normally established for a period of 10 years and is subject to:

§ conditions of the RES construction project: with quotas or without quotas;

§ date of the RES construction project;

§ plant capacity, etc.

The criterion of conditions of the RES construction project (with quotas or without quotas) is the key criterion.

Quotas on RES plants were first introduced in 2015 due to a notable increase in green energy projects and, consequently, an increase in government expenses on green en-ergy purchase amid the limited fi-nancing.

As from 2015, a specially con-vened National joint committee on quotas would each 3 years establish a total power value of all energy plants to be constructed during such 3 years. The government undertakes to buy energy from such plants via public energy networks and to apply price multiplying factors. The follow-ing is normally considered in deter-mining the total volume of quotas:

§ daily adjustment of energy production and consumption schedule, and performance indica-tors of the Belarusian Energy System;

§ BelEnergo provider's costs of purchasing RES energy;

§ compliance with leading

indicators for energy safety of the Republic of Belarus in terms of production of RES electric energy (RES share in the gross consumption of energy resources shall be at least 6% by 2020).

Entities wishing to construct power plants will normally partici-pate in annual competitions which have a number of criteria. Only a part of such entities would be granted quotas.

The government is also buying energy from plants constructed with-out application of quotas, but the price multiplying factor for such plants is much lower (0.7).

It is worthy of note that RES tariffs in Belarus are among the most attractive in Europe, even despite their gradual decline (See table).

15.2. Tax and customs privileges for green energy producers

Tax and customs privi-leges/benefits granted to green energy producers may be nominally classified as:

1. privileges/benefits granted during construction phase;

2. privileges/benefits granted during operation phase.

The following are the privi-leges/benefits granted during con-struction of power plants:

§ exemption from import VAT on equipment (where no investment contract has been concluded with the Republic of Belarus);

§ exemption from import VAT and import customs duties on equipment (where an investment contract has been concluded with the Republic of Belarus).

During the operation phase, only one benefit will be granted to

Energy type Final consumer tariff (Euros)Mult. factor (plant power

from 300 kW to 2 MW)RES producer tariff (Euros)

Sun energy 0,11

0,11

0,11

0,11

1,70

1,25

1,15

0,70

Energy of natural water

flows

Biogas energy

Any (construction

without quotas)

0,19

0,14

0,13

0,08

green energy producers: land plots used for RES production will be ex-empt from land tax.

At the same time, as power plants are normally situated in rural areas, producers of those types of green energy which may be certified as “own products” (for instance, biogas energy) may enjoy the bene-fits granted by Presidential Decree No. 6 dated 7 May, 2012. For instance, it allows entities operating in minor towns and rural areas to be exempt from profit tax and real estate tax during 7 years upon public registra-tion.

15.3. Procedure of apply-ing for RES plants quotas

The procedure of fixing and allocating quotas for RES plants has been established by Resolution No. 662 of the Council of Ministers of the Republic of Belarus dated 6 August, 2015. A brief scheme of investor's actions in order to obtain a quota may be depicted as follows:

Doing Business in Belarus 2017 105 Renewable energy sources

1. Review of volumes of quotas to be

allocated in current year

(a volume of quotas is normally

specified before 30 April)

2. Making a decision on project

efficiency in view of the offered

volume of quotas

3. Searching for fitting raw material

suppliers and land plots

4. Registration of a new legal entity

or preparation of documents of an

existing legal entity

5. Preparation and submission of

applications for quotas to a local

executive authority (before 1

September)

6. Waiting for results of the quota

competitive bidding (decision on

quota allocation to be delivered

before 30 November)

Telecommunicationsand uploading data

to the Internet16

107Doing Business in Belarus 2017Telecommunications and uploading data

to the Internet

Currently, there is a tendency of

improvement of regulatory system in

the provision of telecommunication

services, data transmission and

Internet use in Belarus.

Telecommunication services

are rendered with the use of telecom-

munication networks, providing both

fixed and wireless broadband access.

The Unified Telecommunication

Network of Belarus consists of the

following categories of telecommu-

nication networks situated in the

territory of Belarus:

џ public telecommunication net-

works;

џ dedicated telecommunication

networks;

џ technological telecommunica-

tion networks;

џ telecommunication networks for

special purposes.

The right of radio spectrum

using is provided by the allocation of

radio frequency bands, radio channel

or radio frequencies and/or by as-

signment (allotment) of radio fre-

quency or radio frequency channel

under the appropriate permission.

Telecommunication services

are provided by telecommunication

operators and providers of telecom-

munication services. Telecom-

munication operators provide tele-

communication services on the basis

of a special permit (license) for activi-

ties in the field of communication,

and telecommunication service pro-

viders provide telecommunication

services for the provision of which a

special permit (license) for activities

in the field of communications is not

required.

Carrying out activities in ser-

vices rendering in the field of public

telecommunications (provision of

international, intercity and local

telephone connection, data transmis-

sion services, telephony service via

Internet Protocol, IP-TV service,

mobile telecommunication services,

cellular mobile telecommunication

services, broadcasting of TV and

sound programs, fixed and mobile

satellite telecommunication ser-

vices) requires obtaining a corre-

sponding license in the Ministry of

communications and informatization

of the Republic of Belarus.

Legislation of the Republic fo

Belarus also provides a list of tele-

communication services which may

be rendered without a license:

§ telematic services (except for

IP protocol telephony and IP

television services);

§ free-of-charge services on

data communication with access to

the Internet via transmitting data

with a total installed capacity of 128

ports or less in the places of public

Internet use (computer clubs,

Internet cafes, or other places

offering multiuser access to the

Internet network).

In 2010 the Republic of Belarus

saw initial activities in the central-

ized management of data transmis-

sion networks within the national

territory, in particular, the creation of

the Unified National Data

Transmission Network (hereinafter –

UNDTN) was codified. Telecom-

munication operators use UNDTN

on terms of equal access.

To ensure the functioning and

management of UNDTN (including

the accession of data transmission

networks), the National Unitary

Enterprise “National Center for Traffic

Exchange” (hereinafter – NCTE) was

created.

Creating UNDTN will allow to

use existing resources of engineering

infrastructure of all the participants

of the market more efficient, to

optimize the costs of telecommuni-

cation operators for the engineering

of telecommunication networks in


The development of terrestrial

digital television broadcasting

(DVB-T) was carried out in accor-

dance with the State Program of

Digital Television and Radio

Broadcasting Implementation in the

Republic of Belarus up to 2015. The

main aim of the State Program were

to improve quality of television pro-

grams broadcasting, increase effec-

tiveness of radio-frequency re-

sources' use, save energy, provide an

access to compulsory generally avail-

able state package of digital televi-

sion programs, grasp new types of

receiving and transmitting equip-

ment.

At the beginning of 2016 the

analog television broadcasting was

cut off.

In addition, Edict of the


No. 60 “On measures to improve the

national Internet segment” was

adopted on February 1, 2010. This

Edict regulates issues concerning the

functioning of the national segment

of the Internet, which is a set of infor-

mation networks, systems and re-

sources having Internet connection,

located in the territory of the

Republic of Belarus and/or using

hierarchical names of the national

segment of the Internet, are regu-

lated by the special act.

The business entities and pri-

vate individuals realize goods, per-

form works, and render services in

Belarus using information networks,

systems and resources having

Internet connection via information

networks, systems, and resources of

the Internet nation segment located

on the territory of the Republic

Belarus and correspondingly regis-

tered.

The Internet providers shall

perform identification of subscribers'

devices while rendering Internet-

services, as well as record and stor-

age of information on subscribers'

devices and other information on

rendered Internet services.

The owners of places for public

Internet use (computer clubs,

Internet-cafes etc.) shall perform

identification of the Internet users of

the places for public Internet use,

record and storage of personal data

on Internet services users as well as

information on services rendered by

places for public Internet use.

Also, as of January 1, 2016 the

providers of the Internet services

shall prepare and save actual data on

the Internet resources visited by the

Internet users through special hard-

ware-software devices. The providers

of the Internet services shall main-

tain storage of actual data on the

information resources visited by the

Internet users during one year from

the date of the Internet service's

rendering.

According to the results of the

year 2016 the Republic of Belarus

takes 31st place in terms of the de-

velopment of information and com-

munication technologies in accor-

dance with the international assess-

ment of the International Telecom-

munication Union (ITU). The survey

covered ICT in 175 countries. During

the last several years, the Republic of

Belarus has improved its rating in

terms of its information and commu-

nication technologies rating, which

highlights constant development of

information society in Belarus.

Doing Business in Belarus 2017 108Telecommunications and uploading data

to the Internet

Court system17

110Doing Business in Belarus 2017 Court system

In late 2013 — early 2014 the

court system of the Republic of

Belarus overcame through structural

changes.

If previously the court system

consisted of the Constitutional Court,

general courts and commercial

courts, since January 1, 2014 general

and commercial courts have merged

into a single system of courts of gen-

eral jurisdiction with the Supreme

Court at the head.

Commercial courts have been

renamed economic courts and con-

tinue functioning as courts of certain

specialization within general juris-

diction court system. The Supreme

Commercial Court joined the

Supreme Court and there was the

Judicial Chamber for Economic Cases

established within the Supreme

Court.

Thus, since January 1, 2014 the

court system of the Republic of

Belarus has comprised the

Constitutional Court and courts of

general jurisdiction.

17.1. The Constitutional Court17.1.1. Competence

The Constitutional Court exer-

cises the following powers:

§ verifies the conformity of legal

acts with the Constitution of the

Republic of Belarus, international

legal acts ratified by the Republic of

Belarus, laws of the Republic of

Belarus, decrees and edicts of the

President of the Republic of Belarus;

§ provides a mandatory

preliminary control of laws for their

conformity with the Constitution of

the Republic of Belarus, international

legal acts ratified by the Republic of

Belarus;

§ on a proposal by the President

of the Republic of Belarus decides on

the conformity of international legal

acts, which have not come into force,

with the Constitution of the Republic

of Belarus;

§ on a proposal by the

Presidium of the Council of the

Republic of the National Assembly of

the Republic of Belarus decides on

the facts of systematic or gross

violations of legislative require-

ments by local Councils of Deputies;

§ on a proposal by the President

of the Republic of Belarus officially

interprets decrees and edicts of the


concerning constitutional rights,

freedoms and duties of citizens;

§ on proposals by the President

of the Republic of Belarus, the House

of Representatives of the National

Assembly of the Republic of Belarus,

the Council of the Republic of the

National Assembly of the Republic of

Belarus, the Council of Ministers of

the Republic of Belarus expounds its

position on documents adopted

(issued) by foreign states, interna-

tional organizations and (or) their

bodies, which affect the interests of

the Republic of Belarus in terms of

compliance with generally recog-

nized principles and norms of

international law;

§ on proposals by the President

of the Republic of Belarus conducts a

check of constitutionality of the

legislation directions determined by

the Head of the State, law enforce-

ment practice of courts, enforcement

agencies and other public authori-

ties;

§ decides on elimination of

gaps in laws, on exclusion of a

conflict in laws and legal uncertainty;

§ adopts annual messages to

the President of the Republic of

Belarus and the chambers of the

National Assembly of the Republic of

Belarus on the constitutional legality

in the Republic of Belarus.

17.1.2. Procedure for verifica-

tion of the conformity of legal acts

with the Constitution of the Republic

of Belarus

Only certain bodies are entitled

to apply to the Constitutional Court

with a proposal of verification. They

are:

џ the President of the Republic of

Belarus;

џ the House of Representatives of

the National Assembly of the


џ the Council of the Republic of

the National Assembly of the


џ the Supreme Court of the


џ the Council of Ministers of the


All other entities are entitled to

address the above-mentioned bodies

only with the initiative to verify the

conformity of legal acts.

Conformity verification with

regard to a legal act is carried out, as

a rule, in an open court hearing by the

Constitutional Court panel on the

basis of principles of an adversarial

process, equality of parties, presump-

tion of constitutionality of acts.

Upon results of such conformity

verification the Constitutional Court

issues a resolution, which has su-

preme legal force and direct action

and comes into force since its adop-

tion.

17.2. Courts of general

jurisdictionThe system of general jurisdic-

tion courts consists of:

џ district (city) courts;

џ regional courts and the Minsk

city court, regional economic

courts and the Minsk City

Economic Court;

џ the Supreme Court of the


17.2.1. Competence

District (city), regional courts

and the Minsk city court consider:

§ criminal cases;

§ civil cases arising from civil,

family, labor, housing, land and other

relations provided that at least one of

the parties is an individual;

§ cases involving legal entities

only if stipulated by laws of the

Republic of Belarus, decrees and

edicts of the President of the


§ civil cases arising from

military service relationship, as well

as criminal cases of all crimes

committed by servicemen. Previously

such cases were considered by

military courts and the Belarusian

military court, but since July 1, 2014

these courts have been abolished

and all their authorities have been

transferred to district (city), regional

courts and the Minsk city court.

Cases involving creation, legal

protection and use of intellectual

property regardless of the parties are

considered only by the Intellectual

property judicial board of the

Supreme Court of the Republic of

Belarus.

Regional economic courts and

the Minsk City Economic Court con-

sider:

§ cases on economic (business)

disputes between legal entities,

individual entrepreneurs;

§ cases related to entrepreneur-

ial and other economic (business)

activities;

§ cases on appealing against

non-normative legal acts and actions

(inactivity) of state bodies infringing

rights of legal entities, individual

entrepreneurs in the sphere of

entrepreneurial and other economic

activities;

§ cases on recognition and

enforcement of decisions of foreign

courts, including foreign arbitral

awards on economic disputes;

§ cases with participation of the

Republic of Belarus, administrative

and territorial units of the Republic of

Belarus, state bodies, bodies of local

government and self-government,

organizations which are not legal

entities, officials and citizens only in

cases stipulated by laws of the

Republic of Belarus, decrees and

edicts of the President of the


17.3. Economic courtsAs competence of specialized

courts considering economic cases

and integrated into the system of

general jurisdiction courts has re-

mained, economic courts continue

adjudicating commercial (economic)

disputes.

17.3.1. Jurisdiction of economic

courts

Cases are considered in the first

instance by regional economic courts

and the Minsk City Economic Court.

Cetain cases are considered in the

first instance by the Supreme Court of

the Republic of Belarus (cases related

to state secrets, disputes between the

Republic of Belarus and administra-

tive and territorial units of the

Republic of Belarus, etc.).

The Supreme Court of the

Republic of Belarus is entitled to

accept to proceedings and to con-

sider any case.

17.3.2. Terms of case consider-

ation by courts considering economic

cases in first instance

There are two main stages for a

court to consider economic cases in

the first instance:

§ preparation of a case for

proceedings (as a rule it ends with a

preparatory court hearing not later

than within 15 working days from the

date when a suit is received by an

economic court);

§ court proceedings.

As a rule a case is considered by

an economic court of the first

instance within no more than two


Statistics on activities of general jurisdiction courts for the 1st half-year in 2016¹

Main statistical data on work of general jurisdiction courts

Administrative cases considered by economic courts

Total administrative cases considered

- illegal business activities (p. 1-1, p. 1, p. 2, cl. 12.7 of p. 4 of the Administrative Code)

- violation of trade rules and the code of service rendered to the population (cl. 12.17 of p. 4 of the Administrative Code)

- violation of legal requirements for marking of goods with check (identification) symbols (cl. 12.35 of the

Administrative Code)

- violation of the procedure for pricing (tariffication) (cl.12.4 of the Administrative Code)

- violation of terms and rules of safeguarding activities (cl. 23.57 of the Administrative Code)

Administrative sanctions imposed

5 548

2 117

2 439

413

146

222

5 344

Economic cases

Total cases in the first instance

Cases considered

Property claims

Non-property claims

of which:

on establishment of facts having legal value

on complaints about notarial actions or about a refusal to take such actions

on examination of legality of non-regulatory acts, actions (inaction)

claims satisfied

commercial (economic) disputes and other cases involving foreign entities

claims satisfied

on recognition and enforcement of awards issued by foreign courts

15930

13800

11577

2223

52

36

274

85

477

336

42

1st half-year

in 2016

Court system

¹ Source: Supreme Court of the Republic of Belarus (court.gov.by)


months from the date of adoption of

a ruling by an economic court on

appointment of the case to proceed-

ings.

Certain cases (disputes on state

property, connected with state regis-

tration and liquidation of legal enti-

ties and individual entrepreneurs;

disputes on the release of property

from seizure) are considered within

one month from the date of adoption

of a ruling by an economic court on

appointment of the case to proceed-

ings.

Cases on certain kinds of pro-

ceedings (cases on appealing against

non-regulatory acts, actions (inac-

tion) of state bodies, cases on recog-

nition and enforcement of decisions

issued by foreign courts and foreign

arbitral awards) are considered

within no more than one month from

the date of receipt of a relevant appli-

cation (complaint) by the economic

court.

A case involving foreign entities

located outside the Republic of

Belarus are considered by an eco-

nomic court within no more than

seven months from the date of adop-

tion of a ruling by an economic court

on appointment of the case to pro-

ceedings, unless otherwise is speci-

fied by a corresponding international

treaty of the Republic of Belarus.

If controlling bodies of foreign

claims satisfied

on recognition and enforcement of awards issued by foreign courts

claims satisfied

on appealing awards of international arbitration courts (tribunals) and on issuance of a writ of execution

claims satisfied

complaints about actions of a bailiff

claims satisfied

Arising from matters:

civil

claims satisfied

administrative

claims satisfied

land

claims satisfied

financial

claims satisfied

other public

claims satisfied

Appeals (appeal protests) received

Appeal proceedings initiated

Appeals considered

Total court decisions overturned

Of which:

Decisions

Court rulings issued under cl. 149,151 of the Code of Commercial Procedure

Other court rulings

Proceedings stopped due to conclusion of an amicable agreement

Proceedings stopped due to conclusion of a conciliation agreement

Proceedings stopped due to renunciation of a suit

Court resolutions overturned due to dismissal of a suit without prejudice

Cassational appeals (protests)received

Cassational appeals (protests) considered

Total court resolutions overturned

Of which:

Overturned (changed) with a new resolution adopted

Overturned in full or partially with a case referred for a new trial

One of court resolutions upheld, while others overturned

Overturned with proceedings on a case stopped due to conclusion of a conciliation agreement

Overturned with proceedings on a case stopped due to withdrawal of claims

Overturned with dismissal of a suit without prejudice

Overturned with proceedings on a case stopped due to conclusion of an amicable agreement

Appeals (petitions, motions) for supervisory review received

Appeals (petitions, motions) considered

Protests lodged

336

42

40

772

750

13

3

12517

8212

422

191

3

0

4

4

854

806

1690

1291

1268

271

101

7

21

8

88

34

12

794

560

101

19

61

6

7

5

1

2

131

65

6

Court system


entities, their branches, representa-

tive offices or representatives autho-

rized to participate in a case are lo-

cated in the territory of the Republic

of Belarus, cases involving such for-

eign entities are considered within

general time-frames.

In exceptional cases, taking into

account special complexity of a case,

a period for a case to be considered

may be extended by a chairperson of

an economic court or his/her deputy

for up to four months, and with re-

gard to a case involving foreign enti-

ties located outside the Republic of

Belarus – for up to one year.

17.3.3. Writ proceedings in

economic courts

Writ proceedings mean adop-

tion of a ruling on an injunction

(court order) by an economic court

without a trial and summons of par-

ties on claims which are:

џ uncontroversial;

џ recognized (not contested) by a

debtor but not satisfied yet;

џ amounting up to 100 basic units.

Cases in the framework of writ

proceedings are considered within

no more than twenty days from the

date of receipt of a relevant petition

by an economic court.

Since August, 1 2015 claims for

recovery of a major debt and a pen-

alty which are directly acknowledged

by a debtor in a written form and arise

from a contract of purchase, supply

contract, independent-work contract,

contract of carriage, service agree-

ment, contract of storage, as well as

claims for a major debt arising from a

lease contract have not been subject

to writ proceedings.

In order to recover a debt on

such claims a recoverer must apply to

a notary public to obtain an executive

inscription. The executive inscription

is made within 3 working days from

the date of submission of a relevant

application. The executive inscrip-

tion, as well as a court order, are exec-

utive documents.

17.3.4. Appealing against eco-

nomic court decisions

Economic court decisions may

be appealed in the appeal and cassa-

tion instances, as well as in order of

supervision.

Appeal instance

Decisions of economic court of

the first instance which have not

come into force may be appealed in

the appeal instance.

Appeals are considered by the

appeal instance of regional economic

courts and the Minsk City Economic

Court where such decision has been

issued.

An appeal may be filed within

15 working days after a decision has

been pronounced.

An appeal must be considered

within 15 working days from the date

of its arrival at the economic court.

In exceptional cases, taking into

account special complexity of a case,

a period for an appeal to be consid-

ered may be extended by a chairper-

son of an economic court or his/her

deputy, but by no more than 15 work-

ing days.

A resolution issued by an eco-

nomic court of the appeal comes into

force upon its adoption.

Cassation instance

Judicial decisions of an eco-

nomic court of the first and appeal

instances which have come into force

may be appealed in the cassation

instance.

Cassational appeals are consid-

ered by the Judicial Chamber for

Economic Cases of the Supreme

Court of the Republic of Belarus.

However they are filed through an

economic court of the first instance.

A cassational appeal may be

filed within one month from the date

of coming into force of an appealed

judicial decision.

A cassational appeal must be

considered within one month from

the date when a relevant case has

arrived to the cassation instance.

Order of supervision

Judicial decisions of economic

courts which have come into force

may be reconsidered in the order of

supervision only upon a protest

lodged by officials entitled to do so.

The following officials are

entitled to lodge protests in the order

of supervision:

§ the Chairperson of the


Belarus and his/her deputies;

§ the General Public Prosecutor

of the Republic of Belarus and his/her

deputies.

A supervisory review court may

be:

§ the Presidium of the Supreme

Court of the Republic of Belarus –

with regard to the judicial decisions

adopted by the economic courts of

the first, appeal and cassation

instances;

§ the Plenum of the Supreme

Court of the Republic of Belarus –

with regard to the decisions of the

Presidium of the Supreme Court of


An appeal in exercise of super-

vision may be filed within one year

from the date of entry of a judicial

decision into legal force.

An appeal in exercise of super-

vision must be considered by the

official within two months from the

date of its arrival.

Protests must be considered:

§ within no more than two

months – by the Presidium of the


Belarus,

§ within no more than three

months – by the Plenum of the


Belarus.

17.3.5. State fee rates

Rates of a state fee for consider-

ation of cases with economic courts

are fixed in Appendix 16 to the

Special Part of the Tax Code of the

Republic of Belarus. Their amount

depends on a type (property or non-

property) of claims and a sum thereof,

as well as on other circumstances.

Since January 1, 2016 amend-

ments to the Tax Code of the Republic

of Belarus have come into force, they

have made significant adjustments to

prior rates of the state fee.

17.4. ArbitrationAdditionally, apart from state

courts, international arbitration

Court system


courts may resolve disputes.

Relations connected with es-

tablishment and activities of interna-

tional arbitration courts in the

Republic of Belarus are regulated by

Law dated July 9, 1999 No. 279-З “On

the international arbitration court

(tribunal)”.

A dispute may be resolved in a

permanent international arbitration

court or in an international arbitra-

tion court created with the purpose

to adjudicate a particular dispute (“ad

hoc” arbitration).

There are two permanent inter-

national arbitration courts in the

Republic of Belarus:

§ the International arbitration

court at the Belarusian Chamber of

Commerce and Industry;

§ the International arbitration

court (tribunal) “Chamber of

arbitrators at the Union of Lawyers”.

Most disputes are adjudicated

by the International arbitration court

at the Belarusian Chamber of

Commerce and Industry (hereinafter

referred to as the IAC). The procedure

for hearing a dispute is specified by

the IAC Regulations

(http://www.iac.by/index.php?id=36

778&).

17.4.1. The IAC competence

The IAC adjudicates:

§ disputes between any

subjects of law arising from foreign

trade and other international

economic relations, if the location or

residence of at least one of these

subjects is outside the Republic of

Belarus;

§ disputes between companies

with foreign investments, interna-

tional associations and organizations

established in the territory of the

Republic of Belarus; disputes

between members of the above legal

entities, disputes between these

legal entities and other legal entities

and individual entrepreneurs of the


§ disputes between foreign


entrepreneurs located outside

Belarus;

§ other economic disputes, if

parties have agreed to refer a case to

an international arbitration court and

if it is allowed by the legislation of


A dispute may be adjudicated by

the IAC if parties have agreed to do

so, such agreement may be executed

as a separate arbitration agreement

or as an arbitration clause in a con-

tract. The IAC Regulations specify an

exemplary wording of an arbitration

clause recommended by the IAC to

be included in contracts

(http://www.iac.by/index.php?id=36

789&).

17.4.2. Appointment of

arbitrators

A dispute is adjudicated by the

IAC composed of one or three arbi-

trators. The number of the IAC arbi-

trators shall be agreed by parties. If

parties have not reached an agree-

ment there shall be 3 arbitrators.

If parties have agreed to resolve

a dispute by a sole arbitrator, upon

mutual agreement they shall appoint

a certain person as an arbitrator. If

there is no such agreement, the IAC

Court system

There are the following rates of the state fee at the moment:

Type of claim State fee rates

Property claims

amounting

up to 100 basic units 25 basic units

5 % of the claim amount, but at least 25 basic units

5 % of 1 000 basic units + 3 % of the amount

exceeding 1 000 basic units

from 100 up to 1 000 basic units

from 1 000 up to 10 000 basic units

1% of the claim amount, but no less than the amount

established in the previous application formover 10 000 basic units

Non-property claims

filed by:

legal entities to the Supreme Court of the Republic of Belarus 50 basic units for each claim (act)

legal entities to economic courts 20 basic units for each claim (act)

individual entrepreneurs to the Supreme Court

of the Republic of Belarus and economic courts10 basic units for each claim (act)

individuals to the Supreme Court of the Republic

of Belarus and economic courts5 basic units for each claim (act)

Petitions for writ

proceedings with the

amount:

up to 100 basic units 2 basic units

from 100 up to 300 basic units 5 basic units

over 300 basic unit 7 basic units

Appeals:to appeal instance

to cassation instance

in order of supervision

40 % of the rate established for non-property claims

(petitions, appeals);

40 % of the rate calculated on the basis of the disputed

amount - for property claims

80 % of the rate established for non-property claims

(petitions, appeals);

80 % of the rate calculated on the basis of the disputed

amount - for property claims

Doing Business in Belarus 2017 115 Court system

President shall appoint an arbitrator.

If parties have agreed to resolve

a dispute by three arbitrators, a plain-

tiff shall appoint one arbitrator, a

defendant shall appoint one arbitra-

tor as well. Afterwards two arbitrators

so appointed shall designate the

third arbitrator who shall be the

Chairperson. If a Chairperson has not

been designated, the IAC President

shall appoint such Chairperson.

17.4.3. Term of dispute

resolution in the IAC

The IAC arbitrator(s) shall hear

a case and render an award within

not later than 6 months from regis-

tration of such case. Upon a reasoned

petition furnished by a sole arbitrator

or a Chairperson the IAC President

may prolong the above term.

17.4.4. Law applicable to the

substance of a dispute

The IAC arbitrator(s) shall adju-

dicate a dispute pursuant to such

provisions of laws which parties have

identified as applicable to the sub-

stance of a dispute.

If parties have not specified the

applicable law, the IAC arbitrator(s)

shall render an award based on the

law determined in accordance with

the conflict-of-laws rules which are

recognized as reasonable.

17.4.5. Appealing against the

IAC award

An award rendered by the IAC

may be appealed by submitting a

petition to overturn such award to a

regional economic court (Economic

court of Minsk city) at the location of

the international arbitration court.

The petition to overturn an

award rendered by the IAC shall be

submitted within 3 months from the

date when a party submitting such a

petition has received the award.

However a state court is enti-

tled to overturn an award rendered

by the IAC only on certain grounds

set forth by Law of the Republic of

Belarus dated July 9, 1999 No. 279-З

“On the international arbitration

court (tribunal)” (these grounds gen-

erally regard procedures for a dispute

resolution process). Moreover such

court shall not reexamine a case to its

substance.

17.4.6. Procedure for

enforcement of the IAC award

Awards rendered by the IAC

shall be enforced in the territory of

the Republic of Belarus by applying

to a state court with a petition to

issue a writ to enforce such award.

If the IAC award requires en-

forcement in the territory of another

country, it shall pass a procedure of

the recognition and enforcement

thereof under the UN Convention on

the Recognition and Enforcement of

Foreign Arbitral Awards (it was

signed in New York on June 10, 1958).

There are 156 parties to the

Convention nowadays.

17.4.7. Arbitration costs in the

IAC

Arbitration costs in the IAC

include an arbitration fee and ex-

penses connected with the dispute

resolution process.

In order to file a claim a plaintiff

shall pay a registration fee. An

amount of such registration fee is

included in an arbitration fee and is

deemed to be a part of such arbitra-

tion fee. The registration fee makes

150 euro increased by the rate of a

value added tax set forth by the legis-

lation of the Republic of Belarus (the

rate is 20%). The registration fee is

not subject to the refund or reduc-

tion.

An arbitration fee with regard to

disputes between entities, if at least

one of these entities is located or

resides outside the Republic of

Belarus, is subject to a claim amount

and is calculated on the following

basis (See table).

If a claim does not specify any

amount, an arbitration fee shall be

determined by the IAC President but

such fee shall be at least 700 euro.

An arbitration fee shall be re-

duced by 30 percent, if a case is adju-

dicated by the sole arbitrator.

In any event an arbitration fee

may not be less than 700 euro.

An arbitration fee shall be in-

creased by a value added tax calcu-

lated under the legislation of the

Republic of Belarus (the rate is 20%).

The payment of an arbitration

fee effected by a plaintiff is an essen-

tial precondition for proceedings on a

case to be initiated.

Upon a plaintiff's reasoned

petition the IAC President may per-

mit to initiate proceedings after the

payment of at least 50% of the due

arbitration fee provided that the

other 50% is to be paid before the

first court hearing.

Expenses connected with the

dispute resolution process include:

§ travel allowances and other

expenses incurred by arbitrators;

§ amounts paid to witnesses,

experts (expert institutions) and

professionals;

§ expenses regarding on-site

inspection, transportation and

storage of material evidence;

§ other court costs.

Claim amount (in euro)

700

700 + 5,5% of the sum over 5 000

975 + 5,5% of the sum over 10 000

1 800 + 5% of the sum over 25 000

3 050 + 4,5% of the sum over 50 000

4 175 + 4% of the sum over 75 000

5 075 + 3,5% of the sum over 100 000

6 825 + 3% of the sum over 150 000

8 325 + 1,5% of the sum over 200 000

12 825 + 1% of the sum over 500 000

17 825 + 0,5% of the sum over 1 000 000

22 825 + 0,4% of the sum over 2 000 000

Amounts of an arbitration fee

Up to 5000

5 001 – 10 000

10 001 – 25 000

25 001 – 50 000

50 001 – 75 000

75 001 – 100 000

100 001 – 150 000

150 001 – 200 000

200 001 – 500 000

500 001 – 1 000 000

1 000 001 – 2 000 000

Over 2 000 000

Bankruptcy18

117Doing Business in Belarus 2017 Bankruptcy

In the Republic of Belarus bank-

ruptcy is regulated by the Law of the

Republic of Belarus "On economic

insolvency (bankruptcy)" dated

13.07.2012. The Law sets forth

grounds for declaring a debtor bank-

rupt and regulates a procedure for

and conditions of proceedings on a

bankruptcy case and other related

relationships.

In the Republic of Belarus only

individual entrepreneurs and legal

entities may be qualified as bankrupt.

The legislation of the Republic of

Belarus does not provide for bank-

ruptcy of individuals.

The total number of cases on

economic insolvency (bankruptcy)

pending before economic courts as of

01.01.2017 is 3094 cases, of which

the number of cases on economic

insolvency (bankruptcy) of private

companies is 2988, that makes 96.5%

of the total number of such cases.

The Minsk City Economic Court

adjudicates 50.7% of the total num-

ber of cases on economic insolvency

(bankruptcy) (1569 cases).

As of 01.01.2017 economic

courts of the Republic of Belarus hear

106 cases on economic insolvency

(bankruptcy) of entities significant

for the economy and social sphere of

the state. They include state-owned

companies, companies with the

state-owned share in their statutory

fund, major companies and organiza-

tions with the similar status, budget

revenue generating companies, stra-

tegic organizations.

18.1. Initiation of bankruptcy

proceedingsA petition to initiate bankruptcy

proceedings in respect of a debtor

may be filed to a court considering

economic cases by a debtor, a debtor's

creditor, a prosecutor, a representa-

tive of debtor's employees, public

authorities under certain circum-

stances.

The debtor may apply for bank-

ruptcy if there are the following

grounds:

§ debtor's insolvency is getting

sustainable;

§ debtor's insolvency is

sustainable.

The debtor is obliged to apply

for bankruptcy proceedings within

one month from the date of occur-

rence of the following circumstances:

§ satisfaction of claims of one or

more creditors leads to the impossi-

bility to perform its monetary

obligations by the debtor in full to

other creditors or to termination of

the debtor's activities (legal entity);

§ if a body (individuals)

authorized under constituent

documents of the debtor (legal

entity) to make decisions to liquidate

it (as well as the owner of the debtor's

property (a unitary enterprise or a

body authorized by it), has made a

decision to file a relevant petition to

an economic court;

§ value of the property owned

by the debtor (legal entity) in respect

of which under the civil law the

decision on liquidation has been

made, is insufficient to satisfy claims

of creditors or there is no property at

all.

The creditor is entitled to file a

petition to initiate bankruptcy pro-

ceedings in respect of the debtor if

the following grounds are together:

§ – the creditor has reliable

documented proofs of the debtor's

insolvency being sustainable or

getting sustainable;

§ – enforcement imposed on

the debtor has not been executed

within three months, or it has been

revealed during the enforcement

process that the debtor has no assets

sufficient to satisfy claims made to

him;

§ – there is a debt to the

creditor, which has filed a petition, in

the amount of 100 or more basic

units (as of the date of this review it

makes about 1000 euro), and if the

debtor is a major or other similar

organization, a state body, a legal

entity stocks (shares in the autho-

rized capital) of which are managed

by state bodies or are in economic

management, operational manage-

ment of state-owned legal entities, as

well as a legal entity or an individual

entrepreneur having state and (or)

international orders – in the amount

of 2500 or more basic units (as of the

date of this review it makes about

25000 euro).

In practice, an economic court

commences proceedings on bank-

ruptcy of the debtor if its insolvency is

sustainable or is getting sustainable.

If a petition for initiation of

bankruptcy proceedings does not

meet formal requirements, or there is

no factual basis for the initiation of

bankruptcy proceedings, an eco-

nomic court dismisses such petition.

18.2. General provisions on

bankruptcyAs a general rule, a court sets a

protective period, duration of which

may not exceed three months, in

order to verify the existence of

grounds for opening of bankruptcy

proceedings. At this stage, a court

appoints a temporary manager of the

debtor, while the management bod-

ies of the debtor are not released

from their obligations. The debtor's

head may be dismissed by court only

if violations of the law made by such

head are admitted.

At the end of the protection

period the court shall consider a

petition for bankruptcy, a report pro-

vided by the temporary manager on

its activities and analysis of a finan-

cial condition and solvency of the

debtor, as well as a report on comple-

tion of the plan for an end of pre-trial

rehabilitation in the protective pe-

riod. If the court finds the presence of

the debtor's insolvency, a bankruptcy

procedings will be opened.

There are two (2) forms of bank-

ruptcy proceedings:

§ reorganization (applied in

order to ensure stable and efficient

business (economic) activities, as

well as to restore the solvency of the

debtor);

§ liquidation proceedings.

In the majority of cases there

are liquidation proceedings applied

to debtors in the Republic of Belarus.

During the bankruptcy proceed-

ings a crisis manager operates the

debtor. Such crisis manager is ap-

pointed by the court from candidates

proposed by parties involved in the

case. A crisis manager must have a

corresponding certificate verifying

its right to carry out the activities.

Along with a crisis manager, a

meeting of creditors operates in

bankruptcy proceedings. A meeting of

creditors represents interests of all

creditors and takes all actions

against the debtor on their behalf. In

addition, creditors form a committee

of creditors, where the legislation

provides for its creation.

The legislation provides for

mechanisms to appeal against illegal

activities of crisis managers with

meetings of creditors and courts.

18.3. Priority of creditorsThe Belarusian legislation pro-

vides for the following priority of

creditors in bankruptcy proceedings

(see table).

As a general rule, claims of cred-

itors shall be filed to a crisis manager

within 2 (two) months from the date

of official publication of information

about the opening of bankruptcy

proceedings in respect of the debtor.

If a claim is filed after the deadline it

will be considered last of all, no mat-

ter in what turn they would have to be

satisfied in case of submission in

time. There are exceptions in the

following cases:

§ extension of the deadline by

the meeting of creditors or the court;

§ claims of the first and second

priority made before the end of

settlements with all creditors.

18.4. Contestation of debtor's

transactionsThere are special grounds for

invalidating debtor's transactions

through filing claims by crisis manag-

ers in bankruptcy proceedings. In

particular, there is a possibility to

invalidate the following transac-

tions:

§ transactions made within six

months prior to commencement of

the bankruptcy case (or after

commencement of the bankruptcy

proceedings), if such transactions

involve preferential satisfaction of

property claims of certain creditors

before other creditors;

§ transactions made within one

year prior to commencement of the

bankruptcy case (or after commence-

ment of the bankruptcy proceedings),

if the debtor intentionally damaged

the interests of creditors by these

transactions and other parties knew

or should have known about it;

§ transactions made within six

months prior to commencement of

the bankruptcy case (or after

commencement of the bankruptcy

proceedings) if due to inequality of

parties' obligations it is clear that a

contract of sale, exchange or other

debtor's transaction has been at least

partially executed not in the debtor's

favor at a price significantly

undervalued or overvalued compar-

ing to the price usually charged for

similar goods (works, services) (has

the nature of donation), as well as if

there is a direct or indirect connec-

tion with the debtor's insolvency or

its increase.

18.5. Responsibility of

persons controlling a debtorThe Belarusian legislation pro-

vides for vicarious liability of persons

entitled to give binding instructions

to the debtor, in the event that the

debtor's bankruptcy has been caused

by the actions (or inaction) of these

persons.

Vicarious liability is incurred, in

particular, if the debtor has not ap-

plied for bankruptcy protection in

cases where required to do so (see cl.

18.1). A lawsuit concerning imposi-

tion of vicarious liability may be filed

by a crisis manager, a creditor, a pros-

ecutor, state bodies if there is insuffi-

ciency of the debtor's property to

satisfy the creditors' claims.

The statute of limitations on

filing claims by creditors, a prosecu-

tor and state bodies is 10 years from

the date of initiation of bankruptcy

proceedings.

Moreover the Criminal Code of

the Republic of Belarus specifies

liability for:

§ false bankruptcy;

§ concealment of bankruptcy;

§ deliberate bankruptcy;

§ prevention from compensa-

tion of losses to the creditor.

Doing Business in Belarus 2017 118 Bankruptcy

Out of turn

Court expenses and costs for the publication of information provided by the legislation, as well as settlement of the

debtor's liabilities arising after the opening of bankruptcy proceedings (in particular, payment of a fee to a crisis

manager).

Claims of individuals to whom the debtor is liable for an injury to life or health.Turn 1

Turn 2

Turn 3

Turn 4

Turn 4

Settlement of severance payments, remuneration of persons working (or who have worked) for the debtor under

labor agreements (contracts) and civil contracts, the subject of which is performance of works, provision of services or

creation of intellectual property, on compulsory insurance contributions, contributions for pension insurance, other

payments to the Social Welfare Fund of the Ministry of Labour and Social Protection of the Republic of Belarus, as

well as payments on compulsory insurance against accidents at work and occupational diseases.

Settlement of obligatory payments to the budget (as a rule, payment of taxes and customs duties).

Claims of creditors as for obligations secured by a pledge of the debtor's property.

Settlements with other creditors.

Contact detailsof the Government

bodies19

120Doing Business in Belarus 2017Contact details

of the Government bodies

19.1. The Ministries of the Republic of Belarus

Ministry of Architecture and Construction

Address 220048, Minsk,

Myasnikova st., 39

Phone/fax 226-54-36 / 200-74-24

327-19-34

Website http://www.mas.gov.by

E-mail [email protected]

Ministry of Health


Myasnikova st., 39

Phone/fax 222-65-47 / 222-46-27

Website http://minzdrav.gov.by


Ministry of Foreign Affairs

Address 220030, Minsk, Lenina st., 19

Phone/fax 327-29-22 / 210-42-50

Website http://www.mfa.gov.by


Ministry of Taxes and Duties


Sovietskaya st., 9

Phone/fax 229-79-72, 229-79-29 /

229-66-87

Website http://nalog.gov.by

Ministry of Natural Resources and Environmental

Protection


Kollektornaya st., 10

Phone/fax 200-66-91 / 200-55-83

Website http://www.minpriroda.gov.by


Ministry of Industry


Partizansky Ave., 2/4

Phone/fax 223-93-96 / 223-64-96 /

328-30-48

Website http://www.minprom.gov.by


Ministry of Communications and Information


Nezavisimosti Ave., 10

Phone/fax 287-87-06 / 327-21-57

Website http://www.mpt.gov.by


Ministry of Agriculture and Food

Address 220030, Minsk, Kirova st., 15

Phone/fax 327-37-51 / 327-42-96

Website http://mshp.gov.by


Ministry of trade

Address 220030, Minsk, Kirova, 8/1

Phone/fax 327-48-02 / 227-24-80

Website http://www.mintorg.gov.by


Ministry of Transport and Communications


Checherina st., 21

Phone/fax 334-11-52 / 292-83-91

Website http://www.mintrans.gov.by


Ministry of Finance

Address 220010, Minsk, Sovetskaya st., 7

Phone/fax 222-61-37 / 222-45-93

Website http://www.minfin.gov.by


Ministry of Economy

Address 220030, Minsk, Bersona st., 14

Phone/fax 222-60-48 / 200-37-77

Website http://www.economy.gov.by


Ministry of Energy

Address 220030, Minsk, K.Marksa st., 14

Phone/fax 218-21-02 / 218-24-68

Website http://www.minenergo.gov.by


19.2. State Committees


State Committee on Property


per. Krasnozvezdny, 12

Phone/fax 288-10-19 / 288-27-25

Website http://www.gki.gov.by


State Committee for Science and Technology


Akademicheskaya st., 1

Phone/fax 294-92-44 / 284-02-79

Website http://gknt.gov.by


State Committee for Standardization


Starovilensky trakt, 93

Phone/fax 233-52-13 / 233-25-88

Website http://gosstandart.gov.by



State Customs Committee


Mogilevskaya st., 45/1

Phone/fax 218-90-00 / 218-91-97

Website http://www.customs.gov.by


19.3. Bodies of local government

Brest Regional Executive Committee

Address 224006, Brest, Lenina st., 11

Phone/fax 8 (0162) 21-22-37 / 21-96-66

Website http://www.brest-region.by

E-mail

The Head [email protected]

Lys Anatolii

Vitebsk Regional Executive Committee

Address 210010, Vitebsk, Gogol st., 6

Phone/fax 8 (0212) 42-57-57 / 42-57-81

Website http://www.vitebsk-region.gov.by

E-mail


Sherstnev Nikolay

Gomel Regional Executive Committee

Address 246050, Gomel, Lenina Ave., 2

Phone/fax 8 (0232) 74-42-68 / 75-45-19

Website http://www.gomel-region.by

E-mail


Dvornik Vladimir

Grodno Regional Executive Committee

Address 230023, Grodno, Ozheshko st., 3

Phone/fax 8 (0152) 72-31-90 / 72-02-32

Website http://www.region.grodno.by

E-mail


Kravtsov Vladimir

Minsk Regional Executive Committee

Address 220030, Minsk, Engelsa st., 4

Phone/fax 500-41-25 / 327-24-15

Website

E-mail

The Head http://www.minsk-region.gov.by

[email protected]

Shapiro Semen

Minsk City Executive Committee


Nezavisimosti st., 8

Phone/fax 218-00-01 / 327-68-66

Website

The Head http://www.minsk.gov.by

Shorets Andrei

Mogilev Regional Executive Committee

Address 212030, Mogilev,

Pervomaiskaya st., 71

Phone/fax 8 (0222) 32-80-59 / 22-05-11

Website

E-mail

The Head http://mogilev.region.gov.by

[email protected]

Domanesky Vladimir

Contact details

of the Government bodies

DOING BUSINESSin Belarus

2017

6th EDITION

www.revera.by

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